US spot Bitcoin ETFs see largest-ever daily outflow of $938M
Bitcoin ETFs in the United States have suffered net outflows of more than $2.4 billion in February, as the cryptocurrency battles to maintain its price rise.
Bitcoin exchange-traded funds (ETFs) in the United States have experienced their largest-ever daily net withdrawals as the price of Bitcoin remains below $90,000.
According to CoinGlass statistics, the 11 Bitcoin BTC$88,797 funds experienced a net outflow of $937.9 million on February 25, marking the sixth consecutive trading day of outflows.
The ETF exodus comes after a crypto market meltdown that has seen Bitcoin fall by 3.4% in the last day, dropping to a 24-hour low of $86,140 from an intraday high of more than $92,000.
The Fidelity Wise Origin Bitcoin Fund (FBTC) topped the day’s losses, with outflows totalling $344.7 million, a new record for the ETF. The runner-up was BlackRock’s iShares Bitcoin Trust (IBIT), which saw an outflow of $164.4 million.
The Bitwise Bitcoin ETF (BITB) lost $88.3 million, while Grayscale’s two funds lost a total of $151.9 million, with $66.1 million coming from the Greyscale Bitcoin Trust (GBTC) and $85.8 million from the Bitcoin Mini Trust ETF (BTC).
Around $2.4 billion has fled the 11 ETFs this month, with only four days of net inflows.
Nate Geraci, President of ETF Store, stated in a February 26 X post that he is “still amazed at how much TradFi hates Bitcoin and crypto.”
“Huge victory laps at every downturn,” he observed. “Hate to break it to you, but no matter how big drawdowns are, it’s not going away.”
According to analysts and industry professionals like as BitMEX co-founder Arthur Hayes and 10x Research head of research Markus Thielen, the majority of Bitcoin ETF investors are hedge funds looking for arbitrage profits, rather than long-term Bitcoin investors.
On February 24, Hayes forecasted that Bitcoin will fall to $70,000 due to the continuous outflow from spot ETFs. Many IBIT holders are hedge funds who went long on ETFs and shorted CME futures to obtain a higher yield than short-term US Treasury bonds, he noted.
However, if the “basis” yield declines along with the BTC price, these funds will unwind their IBIT bets and purchase back CME futures,” he stated.
Thielen, whose research on Feb. 24 revealed more than half of spot Bitcoin ETF investors were funds playing the ETF arbitrage game, said the unwinding process is “market-neutral” because it involves selling ETFs while simultaneously buying Bitcoin futures, “effectively offsetting any directional market impact.”
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