Investor interest in spot Bitcoin exchange-traded funds (ETFs) appears to be waning, with outflows totaling $218 million over the past day.
According to data from Farside Investors, BlackRock’s IBIT Bitcoin ETF saw its second consecutive day of zero flows, while Fidelity’s FBTC saw its first daily net outflow, totaling $23 million.
Other US Bitcoin funds have seen notable daily outflows. The Grayscale GBTC fund continued its exit trend, losing $139.37 million, while $31.34 million left Ark Invest and 21Shares’ ARKB fund. Additionally, Valkyrie’s fund saw outflows of $20.16 million and Bitwise saw a negative inflow of $6 million.
In contrast, Franklin Templeton’s EZBC became the only fund to generate daily net inflows, attracting $1.87 million.
Despite these significant outflows, net inflows into the ETFs have exceeded $12 billion since their launch in January.
Why are Bitcoin ETFs experiencing outflows?
Earlier in the week, James Butterfill, head of research at CoinShares, explained that these outflows signaled a decline in ETP/ETF investor interest, fueled by speculation about potential delays in rate cuts by the Federal Reserve.
At the same time, some market experts have pointed out that the slowdown is necessary so that the market can take a breather. Eric Balchunas, senior ETF analyst at Bloomberg, reported that Fidelity’s FBTC and BlackRock’s IBIT broke records for highest net assets in the first 72 days after launch.
He said:
“The home league of IBIT, FBTC and others shows how overheated this whole thing was, a break was overdue to be honest.”
Fidelity FBTC and BlackRock IBIT are particularly notable as they are market leaders, collectively managing over $27 billion in assets.
However, Morgan Stanley is expected to consider allowing its 15,000 brokers to recommend spot Bitcoin ETFs to its clients, which could potentially reignite interest in the market.
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