ETFs
Bitcoin ETFs See Net Outflows of $200M in “Risk-Free Mode” Ahead of FOMC and CPI
U.S.-listed spot Bitcoin exchange-traded funds (ETFs) saw a second straight day of outflows as traders likely reduced their risks ahead of major macroeconomic reports scheduled for later on Wednesday.
Data from SoSoValue shows that all eleven ETFs saw $200 million in net outflows on Tuesday, the highest since May 1 figures of $580 million. The redemptions took place amid a massive BTC sell-off, during which the asset briefly fell to $66,200 before recovering.
Grayscale’s GBTC accounts for the majority of the $120 million in outflows, putting it ahead among its peers. GBTC continues its infamous streak of being the worst performing ETF in terms of outflows since going live in January, racking up a cumulative $18 billion in outflows.
Ark Invest’s ARKB, Bitwise’s BITB, Fidelity’s FBTC, and VanEck’s HODL saw capital outflows ranging from $56 million to $7 million. None of the ETFs saw inflows.
Traders said these capital outflows likely mitigated risks to the stock ahead of Wednesday’s CPI reading and the two-day meeting of the Federal Open Market Committee (FOMC) which ends today, during which the Fed’s monetary policy will be decided.
“The markets are [in] risk-free mode ahead of CPI and FOMC tomorrow. This month’s FOMC will also release the Dot Plot, which informs the market how many cuts the Fed plans for the remainder of 2024,” Singapore-based QCP Capital said in a message on Tuesday.
However, the company added that its long-term bullish view remains intact.
“Despite the short-term headwinds, we believe this could be a good opportunity to accumulate coins. Bullish events on the horizon, such as the possible spot ETH ETF going live alongside Biden and Trump in a verbal arms race to win the crypto vote,” QCP said.
Other headwinds are Treasury Secretary Janet Yellen’s speech on Friday, which could cause a reaction on riskier assets such as cryptocurrencies, based on comments, as previously reported.