Prolonged Outflows Hit Bitcoin Spot ETFs Amid Bearish Market Sentiment

Bitcoin spot ETFs have been facing significant outflows for seven consecutive days, reflecting a bearish sentiment in the market. On June 24, the total net outflow reached $174 million, according to data from Farside Investors, with Grayscale ETF GBTC alone contributing $90.43 million to this figure. Currently, the total net asset value of Bitcoin spot ETFs stands at $51.53 billion.

The data from Farside Investors highlights that this two-week period marks the largest outflows since U.S. spot bitcoin ETFs were approved in January. Investors have withdrawn a net total of $1.1 billion from these funds during this time.

Digital Investment Products Suffer Outflows

Digital asset investment products have also experienced outflows for the second consecutive week, amounting to $584 million, according to CoinShares. Investor pessimism regarding potential interest rate cuts by the Federal Reserve is believed to be a contributing factor. Last week, global ETP trading volumes hit their lowest since the launch of U.S. ETFs in January, with just $6.9 billion traded.

The United States saw the largest outflows at $475 million, followed by Canada with $109 million. Germany and Hong Kong experienced outflows of $24 million and $19 million, respectively. In contrast, Switzerland and Brazil saw inflows of $39 million and $48.5 million, respectively.

Bitcoin had the most significant outflows at $630 million, but short positions on Bitcoin also saw outflows of $1.2 million, indicating that investors did not increase their short positions despite negative sentiment. Ethereum faced outflows of $58 million, while some altcoins like Solana, Litecoin, and Polygon saw inflows of $2.7 million, $1.3 million, and $1 million, respectively. Multi-asset products saw inflows of $98 million, suggesting some investors saw the market weakness as a buying opportunity.

Bitcoin Price Drops Below $60,000

June has been a tough month for Bitcoin, with its price briefly falling below $60,000 after nearly surpassing the previous all-time high of over $73,000 earlier in the month. Adding to the challenges, the distribution of Bitcoin owed to former customers of the defunct crypto exchange Mt. Gox is imminent. This distribution could introduce up to 140,000 BTC into the market.

Mt. Gox, which filed for bankruptcy over a decade ago following multiple hacking incidents, announced it would start returning assets to its customers in July. The exact amount of Bitcoin to be distributed remains uncertain, with estimates ranging from 65,000 to 140,000 BTC, potentially valued at up to $9 billion. Concerns have been raised about the impact of this influx on Bitcoin prices, but some argue that the potential selling pressure may be overstated, as creditors have had years to sell their claims if they needed immediate funds.