Bitcoin exchange-traded funds have recorded $510 million in net inflows over the past three days since Friday, reversing a prolonged outflow trend. The shift follows an eight-week period during which the products shed roughly $8 billion as Bitcoin fell to a 21-month low. James Butterfill, head of research at asset manager 21Shares, described the recent inflows as the largest since outflows began in early May, suggesting sentiment may be stabilizing after what he termed the largest run of outflows ever observed in Bitcoin ETF history.
Bitcoin ETFs Record $510 Million Inflows Over Three Days
Exchange-traded funds tied to Bitcoin have pulled in roughly $510 million since Friday, marking three consecutive days of net inflows. Butterfill told Decrypt the figures represent the largest inflows observed since outflows began in early May. He stated, "It looks like sentiment might be turning a corner," and added, "They are the largest inflows we've seen since the outflows began in early May, suggesting we're maybe through the worst of it."
On Wednesday, Bitcoin changed hands around $62,000, a 4% increase over the past week, according to CoinGecko. Earlier this month, the digital asset fell as low as $58,000. Bitcoin has declined from $126,000 in October.
Eight-Week Outflow Period Totals $8 Billion
Bitcoin ETFs have experienced $8 billion in outflows over the past eight weeks. Year-to-date outflows deepened to $2.8 billion amid the record bleed. On a proportional basis, Butterfill said the latest streak of outflows represented 8% of assets under management for Bitcoin ETFs, mirroring activity during cycle lows in 2018. He described this year's drawdown as similar to one last February that saw investors withdraw $5.2 billion.
According to CoinGlass, daily net outflows peaked at $733 million during the latest drawdown, a threshold surpassed a handful of times last year.
Average Bitcoin ETF Buyer Allocated at $83,800 Price Level
Based on the average cost basis for allocations to Bitcoin ETFs, the average buyer gained exposure when Bitcoin was valued around $83,800, according to Glassnode. With Bitcoin currently trading around $62,000, the majority of investors who have allocated to Bitcoin ETFs are underwater.
Whales Sold $40 Billion in Bitcoin Since Price Peak
So-called whales—who typically hold 1,000 Bitcoin or more—have sold more than $40 billion worth of Bitcoin since the digital asset's price peaked last year, Butterfill said. He noted that the source of negative price pressure has abated as of late, with the largest holders shifting their behavior.
Butterfill cautioned that expectations of tighter monetary policy in the U.S. could prevent Bitcoin from breaking out of its current range, as the Federal Reserve continues fighting inflation amid conflict in the Middle East. He stated, "We're not in a situation where we can say the Fed is on the cusp of cutting rates, and that would be very supportive to Bitcoin," and added, "Bitcoin remains very, very sensitive to the inflation outlook, and by proxy, the Iran war and the outlook from the Fed."
FAQ
What caused the recent Bitcoin ETF inflows?
Bitcoin ETFs recorded $510 million in net inflows over the past three days since Friday, reversing an eight-week outflow trend. James Butterfill of 21Shares described the inflows as the largest since outflows began in early May, suggesting investor sentiment may be stabilizing after Bitcoin fell to a 21-month low.
How much have Bitcoin ETFs lost during the outflow period?
Bitcoin ETFs shed roughly $8 billion over the past eight weeks, with year-to-date outflows reaching $2.8 billion. Butterfill noted the outflows represented 8% of assets under management, comparable to cycle lows in 2018. Daily net outflows peaked at $733 million during the drawdown, according to CoinGlass.
What is the average cost basis for Bitcoin ETF investors?
According to Glassnode, the average buyer gained exposure to Bitcoin ETFs when Bitcoin was valued around $83,800. With Bitcoin currently trading around $62,000 on Wednesday, the majority of investors who allocated to Bitcoin ETFs are underwater.
