On March 14, Spot Bitcoin exchange-traded funds (ETFs) experienced a significant decrease in net inflows, reaching a mere $132 million, marking an 80% drop from the previous day.
Bitcoin ETFs Experience Volatility: Record Inflows Followed by Significant Decline
On Tuesday, there was a record-breaking single-day inflow of $1.05 billion into Bitcoin ETFs. However, this trend took a sharp turn on Wednesday, with only $684 million flowing in, representing a 38.3% decrease. The slump continued into Thursday, marking the second consecutive day of decline.
Bitcoin ETF flow data. Source: BitMEX
Diverging Trends: Grayscale's GBTC Outflow Amidst Inflows to Other Bitcoin ETFs
Despite an outflow of $257 million from Grayscale’s GBTC, other ETFs like VanEck Bitcoin Trust ETF (HODL) and Fidelity’s FBTC managed to record inflows of $13.8 million and $13.7 million, respectively. Notably, BlackRock’s IBIT ETF recorded the largest inflow share at $345 million.
Relationship Between Declining ETF Inflows and Bitcoin Price Fluctuations
The declining ETF inflows seem to correlate with fluctuations in the BTC price. After hitting a new all-time high above $73,000 on Wednesday, BTC reversed course, dropping below $69,000 on Thursday and further falling to the $66,000 range on Friday.
Deciphering Market Volatility: Regulatory Uncertainties and Macroeconomic Factors
Market pundits attribute the current volatility to a combination of regulatory uncertainties and macroeconomic factors, which have made investors more cautious. The upcoming Federal Open Market Committee (FOMC) meeting is also contributing to the apprehension, as investors await insights into the Federal Reserve's future plans regarding interest rates.