US spot Bitcoin ETFs experienced the largest daily net outflow in history. According to CoinGlass data, a total of 937.9 million USD left 11 Bitcoin-focused funds, it was the sixth consecutive day of sell-offs.
Crypto markets experience record capital outflows
The capital outflow comes at a time when the crypto market has plunged, with Bitcoin depreciating 3.4% over the past 24 hours. From an intraday high of over 92,000 USD , it fell to a daily low of 86,140 USD. The largest outflow was recorded by the Fidelity Wise Origin Bitcoin Fund (FBTC), from which investors withdrew a record 344.7 million USD. In second place was the BlackRock iShares Bitcoin Trust (IBIT) with outflows of 164.4 million USD.
The Bitwise Bitcoin ETF (BITB) lost 88.3 million USD, while Grayscale’s funds lost 151.9 million USD overall – 66.1 million USD flowed out of the Grayscale Bitcoin Trust (GBTC) and another 85.8 million USD from the Bitcoin Mini Trust ETF (BTC). In total, approximately 2.4 billion USD has flowed out of these 11 funds since the beginning of February, with only four days of net capital inflows during the month.
Hedge funds dominate bitcoin ETFs
Analysts and industry experts, including BitMEX co-founder Arthur Hayes and 10x Research head Markus Thielen, say most investors in Bitcoin ETFs are hedge funds looking for arbitrage returns, not long-term BTC investors. Hayes predicted on Feb. 24 that BTC would fall to 70,000 USD as a result of continued outflows from spot ETFs. “Many IBIT holders are hedge funds that have had long-term exposure to ETFs while shorting CME futures to get a higher yield than short-term US Treasuries,” he explained.
“But when this ‘basis’ return falls with the price of BTC, these funds sell off their positions in IBITs and buy back CME futures, ” he added. Thielen, whose Feb. 24 research revealed that more than half of investors in spot Bitcoin ETFs are funds involved in arbitrage trades, said the sell-off process is market neutral because it involves selling ETFs and simultaneously buying Bitcoin futures, effectively offsetting any directional market impact.
CryptoTeam
