Recently, the crypto market has been experiencing significant challenges, culminating in a series of notable outflows observed in Bitcoin and Ethereum exchange-traded funds (ETFs) and related products. The trends signal a worrying sentiment among investors as the crypto landscape continues to face existential hurdles.
Last week alone, financial products tracking Bitcoin and Ethereum witnessed outflows exceeding $1.2 billion across multiple jurisdictions, including the United States, Switzerland, and Canada. When factoring in other digital asset products, total withdrawals escalated to a staggering $1.7 billion, bringing the cumulative outflows over the past five weeks to an alarming $6.4 billion.
$980M Leaves U.S. Spot Bitcoin ETFs
A recent report from CoinShares revealed that crypto investment products have recorded their 17th consecutive day of outflows, with Bitcoin at the forefront of this trend. This is the longest negative streak documented by the firm since it began tracking data in 2015. The surge in withdrawals, coupled with declining prices, has resulted in a total assets under management decrease of $48 billion for digital asset investment products.
Within the U.S. spot Bitcoin ETF sector, the market alone accounted for over $980 million in outflows spanning across products from major asset managers, including BlackRock, Grayscale, Fidelity, Ark Invest/21Shares, and WisdomTree. BlackRock’s IBIT experienced the most significant withdrawals of $383 million, while Fidelity’s FBTC saw outflows amounting to $316 million. Remarkably, IBIT registered inflows on only one of the five trading days, while FBTC had a similar trend, marking only three days of outflows in a week where inflows were almost non-existent.
Between March 10 and March 14, the U.S. Bitcoin ETF market reflected discouraging trends, recording only one inflow day according to CoinGlass data. Although sporadic inflows were logged by IBIT, FBTC, Ark Invest’s ARKB, VanEck’s HODL, and Bitwise’s BITB, they failed to counterbalance the massive outflows observed, with several days marked by a total absence of inflows.
Ethereum Funds Also Experience Decline
In parallel, the U.S. spot Ethereum ETF market has also been enduring a stretch of outflows since March 5, culminating in a loss of $189 million last week alone. BlackRock’s ETHA led these losses, with outflows exceeding $63 million, followed closely by Fidelity’s FETH, which saw withdrawals surpassing $61 million. Notably, the Ethereum spot ETFs recorded only two days of inflows, the first positive movements since the early March downturn, yet these were insufficient to offset previous losses, as deposits were less than $1.5 million on both occasions.
As these outflows persist, Bitcoin and Ethereum struggle to reestablish themselves within the $90,000 and $2,000 price ranges, respectively, amidst significant market volatility and investor skepticism. The implications of these trends highlight an urgent need for potential recovery strategies within the cryptocurrency landscape.
The ongoing outflows from Bitcoin and Ethereum ETFs underscore a critical moment in the cryptocurrency market, prompting investors to rethink their strategies and potentially adopt a cautious approach moving forward.
