Home Bitcoin News Bitcoin ETF Outflows Surge as Investors Shift Holdings Amid Market Volatility

Bitcoin ETF Outflows Surge as Investors Shift Holdings Amid Market Volatility

Bitcoin ETF

As the sun set on April 2nd, a staggering $87 million ebbed out of ARK 21Shares, marking the first instance where its daily outflow eclipsed that of GBTC since the advent of spot Bitcoin ETFs in the United States. This seismic shift, equivalent to roughly 1,300 BTC, has captured the attention of seasoned investors and fledgling enthusiasts alike, serving as a barometer for the shifting tides within the cryptocurrency market.

But this tale of flux extends beyond a singular event. April 1st witnessed the inaugural day of outflows for ARK 21Shares, as it bled $300,000 in assets. This trend persisted into April 2nd, culminating in consecutive days of outflows for the once-stalwart ETF.

Conversely, Grayscale, a longstanding pillar in the cryptocurrency investment sphere, continues to grapple with consistent outflows, experiencing a daily drainage of $81.9 million. Despite this hemorrhaging, it’s noteworthy that GBTC’s outflow on this particular day was relatively modest compared to its recent history. Over the past five trading days, GBTC has shed an average of $254 million per day, amounting to a staggering total of $15.1 billion over the past three months.

Yet, amidst this tumult, amidst the ebb and flow of capital, there exists a beacon of stability. BlackRock’s fund, amidst the chaos of outflows, welcomed a robust inflow of $150.5 million. This net aggregate inflow, amounting to $40.3 million for the day, underscores the nuanced landscape of investment in digital assets.

ARK 21Shares, despite the recent spate of outflows, retains its position as the third-largest among the newly launched spot ETFs, excluding Grayscale, with assets under management (AUM) totaling $2.2 billion. BlackRock and Fidelity loom large in the domain, commanding AUMs of $14.1 billion and $7.6 billion, respectively.

But beyond the realm of ETFs lies a more profound narrative—the narrative of Bitcoin itself. Despite relinquishing a staggering 291,000 Bitcoin since its metamorphosis into an ETF, GBTC remains the vanguard, boasting a total holding of approximately 329,000 Bitcoin at the time of this publication. This underscores a fundamental truth: amidst the flux of financial instruments, the allure of Bitcoin endures.

The backdrop against which these developments unfold is one of market volatility. The price of Bitcoin has embarked on a downward trajectory since the inception of April, witnessing a decline of approximately 9% from last week’s zenith of $71,500. On April 3rd, Bitcoin briefly dipped below $65,000 amidst the backdrop of increasing ETF outflows, underscoring the intricate interplay between market sentiment and investor behavior.

In a parallel development, the cryptocurrency market witnessed the debut of the first-ever 2x and -2x leveraged spot Bitcoin ETFs. ProShares, the progenitors of these instruments, introduced them under the tickers BITU and SBIT. These leveraged ETFs promise heightened volatility, with Bloomberg ETF analyst Eric Balchunas noting a standard deviation of about 150%, positioning them among the top 5 most volatile ETFs in the United States.

As the sands of the cryptocurrency market continue to shift, investors find themselves navigating treacherous waters. The allure of Bitcoin persists, albeit against a backdrop of heightened volatility and shifting investment strategies. In this ever-evolving landscape, adaptability and foresight reign supreme as investors seek to navigate the complex interplay between market dynamics and investment opportunity.

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Evie is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs.

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