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Spot Bitcoin ETFs Suffer $158 Million Outflows on Wednesday as Investors Exit

The launch of the first Bitcoin spot exchange-traded funds (ETFs) in the US was met with much anticipation and excitement by the crypto community. However, the initial euphoria seems to have faded as the market data shows more outflows than inflows in the first nine days of trading.

According to the latest report by CryptoCompare, a leading provider of cryptocurrency data and indices, the net outflows from Bitcoin spot ETFs amounted to $528 million as of January 24, 2024. This is mainly due to the massive sell-off by Grayscale, the largest digital asset manager in the world, which has seen its Bitcoin Trust (GBTC) lose its premium and attractiveness since the approval of Bitcoin spot ETFs.

Spot Bitcoin ETF outflows

Grayscale has been the biggest loser in the Bitcoin spot ETF market, as it has sold 106,091 Bitcoin worth $4.2 billion in the same period. This represents a significant reduction in its Bitcoin holdings, which stood at 654,600 Bitcoin as of January 1, 2024.

On the other hand, the inflows into Bitcoin spot ETFs have reached $1.2 billion in the first nine days of trading, giving a net balance of $824 million in net inflows. The most popular Bitcoin spot ETFs are the Valkyrie Bitcoin Trust (BTF) and the ProShares Bitcoin Strategy ETF (BITO), which have attracted $611 million and $501 million respectively.

Total BTC outflow

However, the inflows have also slowed down in the past few days, as the market sentiment has turned bearish and the Bitcoin price has remained stagnant around $40,000. The Wisdomtree Bitcoin Trust (WBTC), which was the third Bitcoin spot ETF to launch in the US, has seen the lowest inflow of just $10.6 million on Wednesday, January 24, 2024.

The report suggests that the hype around Bitcoin spot ETFs has been slightly overblown, as many investors were expecting a price rally soon after the ETF approval. However, the reality has been different, as the Bitcoin spot ETFs have not had a significant impact on the Bitcoin price or the overall market liquidity.

The report also notes that the Bitcoin futures ETFs, which were the first type of Bitcoin ETFs to launch in the US in October 2023, have performed better than the Bitcoin spot ETFs in terms of inflows and returns. The Bitcoin futures ETFs have seen $6.8 billion in inflows and have delivered an average return of 8.7% since their inception, while the Bitcoin spot ETFs have seen $1.2 billion in inflows and have delivered an average return of -0.4% since their inception.

The report concludes that the Bitcoin spot ETFs are still in their early stages and may take some time to gain more traction and adoption among investors. It also states that the Bitcoin spot ETFs may face more competition and challenges from other types of crypto ETFs, such as Ethereum ETFs and DeFi ETFs, which are expected to launch in the near future.

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