Bitcoin ETFs See Significant Withdrawals Following FOMC Meeting

Significant Outflows from Bitcoin ETFs

U.S. listed spot Bitcoin ETFs have seen substantial outflows totaling $726 million since the recent Federal Open Market Committee (FOMC) meeting. On June 17 alone, there were outflows of $146 million, as reported by Sosovalue data.

Fidelity’s Bitcoin ETF (FBTC) led the outflow trend with $92 million, followed by ARK Invest’s ARK Next Generation Internet ETF (ARKB) with $50 million. This marks a continuation of a broader trend, with net outflows recorded in five of the past six days.

FOMC Meeting Impact

The latest wave of outflows follows the FOMC meeting on June 11, where the federal funds rate was kept between 5.25% and 5.50%. This decision aligns with the Fed’s strategy to combat inflation, which remains above the 2% target. The outflows reflect growing investor caution in response to the central bank’s stance on interest rates.

Investor Sentiment and Market Dynamics

The significant outflows from spot Bitcoin ETFs can be attributed to several factors, including monetary policy uncertainty and profit-taking. The FOMC’s recent decisions have introduced uncertainty into the markets, prompting investors to de-risk their portfolios amid economic concerns.

Jag Kooner, Head of Derivatives at Bitfinex, noted that the market experienced a shift in sentiment, with substantial outflows following a period of consistent inflows. Kooner explained that ETF investors tend to amplify market movements, with significant inflows and outflows reflecting changes in market conditions.

Additionally, the unwinding of basis arbitrage trades and forced deleveraging contributed to the outflows. Traders are selling ETF positions and closing short positions in response to negative funding rates, leading to a decline in Bitcoin open interest on the CME.

Future Market Outlook

As the market continues to digest the implications of the FOMC meeting and other economic indicators, volatility in the crypto market is expected to persist. The outflows from spot Bitcoin ETFs underscore the dynamic nature of investor sentiment and market strategies in response to broader economic signals.