US Bitcoin Spot ETFs Experience Significant Outflows, Yet Underlying Strength Persists
US spot Bitcoin Exchange-Traded Funds (ETFs) faced substantial selling pressure on Thursday, recording a staggering net outflow of $194.6 million. This marks the largest single-day capital exodus for these investment vehicles in the past two weeks, signaling a notable shift in investor behavior.
Data from SoSoValue reveals that several prominent ETFs bore the brunt of this withdrawal. BlackRock’s IBIT led the pack with a net outflow of $112.9 million, followed by Fidelity’s FBTC, which saw $54.2 million depart. Other funds, including VanEck (HODL), Grayscale (GBTC), and Bitwise (BITB), also experienced significant net outflows during this period.
According to Nick Ruck, Research Director at LVRG Research, this wave of capital withdrawal is primarily attributable to the ongoing unwinding of “Basis Trades.” Ruck elaborated that the compression of the spread between Bitcoin futures and spot prices, falling below the breakeven point, has compelled arbitrage traders to liquidate their positions. This forced selling has, in turn, intensified liquidity withdrawal amidst prevailing market volatility.
Looking ahead, Ruck emphasized that market participants are closely monitoring upcoming economic indicators, particularly the latest US inflation data and the Federal Reserve’s (Fed) interest rate meeting scheduled for December 10. He suggested that “a potential Fed rate cut of 25 basis points, coupled with signals of further monetary easing, could provide much-needed stability to market sentiment.”
Despite the recent outflows, not all analysts are bearish. Timothy Misir, Head of Research at BRN, offers a contrasting perspective, highlighting the underlying resilience of the Bitcoin market. Citing data from CryptoQuant and Glassnode, Misir noted that the total Bitcoin holdings across exchanges have plummeted to approximately 1.8 million coins – a level not seen since 2017. This historic low suggests a strong “HODLing” sentiment among investors, indicating a preference for long-term holding over selling.
“The market, in fact, possesses a solid foundation,” Misir asserted. “We’re witnessing persistent accumulation, thinning exchange supply, and prices holding steadily above the ‘True Market Mean.’ However, what’s truly missing at this juncture is the critical momentum required to propel Bitcoin into the $96,000 to $106,000 price range.”
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