A total of $510 million in net inflows were recorded in Bitcoin-linked exchange-traded funds in the last three trading days. Thus, after the series of accelerating exits in recent weeks, the first strong signal indicating a change in direction in investor flow emerged.
First sign of recovery after the debut series
Bitcoin ETFs, seen among Wall Street’s primary exposure to the cryptocurrency market, have attracted net inflows for three consecutive days since Friday. James Butterfill, who manages the research unit at asset management company 21Shares, said that this picture may indicate a recovery, albeit limited, in sentiment after the sharp outburst period that started at the beginning of May. 21Shares is known as a global asset manager that offers cryptocurrency-focused investment products.
James Butterfill states that the latest inflows are the strongest since the exit wave in early May, indicating that the toughest part of the market may be behind us.
Bitcoin ETFs have lost nearly $8 billion in the last eight weeks. In the same period, while investors’ risk aversion tendency strengthened, total net outflow reached 2.8 billion dollars since the beginning of the year.
| Indicator | Data |
|---|---|
| Net flow in last 3 days | $510 million entry |
| Total movement in the last 8 weeks | $8 billion exit |
| Net flow since the beginning of the year | $2.8 billion exit |
Price recovered, losses continue
Bitcoin changed hands around $62,000 on Wednesday. This level corresponds to an increase of approximately 4% in the last week. At the beginning of the month, the price dropped to $ 58,000. However, many ETF investors are still at a loss. According to Glassnode data, the average cost level for investors entering these products is approximately $83,800.
Butterfill said the latest wave of outflows accounted for 8% of assets under management in Bitcoin ETFs. According to him, this rate is similar to the behavior seen at the cycle bottoms in 2018. He also noted that this year’s withdrawal is comparable to last February, when investors pulled $5.2 billion from the market.
Whale sales and Fed expectations are being monitored
A significant part of the pressure in the market resulted from large investor movements. Whales, who typically hold assets of 1,000 Bitcoins or more, have sold over $40 billion worth of Bitcoin since last year’s price peak, Butterfill said. He also pointed out that this sales pressure has weakened recently.
Despite this, Butterfill emphasized that expectations that monetary policy in the US may remain tighter than expected may make it difficult for Bitcoin to make a strong exit from the current band. While the US Federal Reserve continues its fight against inflation, the tension in the Middle East is also considered to have an impact on risk appetite.
Butterfill emphasizes that it is too early to say that the Fed is very close to an interest rate cut, so Bitcoin remains highly sensitive to the inflation outlook and signals from the Fed.
On the other hand, although the last ETF sales wave reached a remarkable level, the severity of the daily outflows did not exceed the harshest levels seen last year. According to CoinGlass data, the daily net outflow reached a maximum of 733 million dollars during the last withdrawal period. This threshold was seen at higher levels several times last year.
