Fidelity Bitcoin ETF Experiences Initial Daily Net Outflows Since January Debut

Fidelity Bitcoin ETF Experiences First Day of Net Outflows Since January Launch


By Hassan Shittu
Published: April 26, 2024 11:21 EDT
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Reading Time: 3 minutes


The Fidelity Wise Origin Bitcoin (FBTC) ETF, a major player in the spot Bitcoin exchange-traded fund (ETF) market, faced a significant setback on Thursday as it reported its first day of net outflows since its launch. The ETF saw a substantial outflow of nearly $23 million, marking a notable event in the cryptocurrency market.
This outflow trend, which is the first of its kind since its introduction in January, had a ripple effect on other prominent funds in the cryptocurrency market, providing a broader perspective on the current state of the market.
On the same day, well-known names in the cryptocurrency market, such as ARK 21Shares’ ARKB, Valkyrie’s BRRR, and Bitwise’s BITB, also experienced outflows of $31.3 million, $20.2 million, and $6 million, respectively.
The outflow from Fidelity Bitcoin ETF came as a surprise. According to data from SoSoValue, the outflow amounted to $22.61 million on Thursday. This deviation from its typical performance indicates a shifting sentiment among investors in the Bitcoin market.
Among the affected funds, Franklin Templeton’s EZBC emerged as a top performer, attracting a net inflow of $1.87 million. However, Grayscale’s GBTC counterbalanced this positive momentum, experiencing a significant outflow of $139 million.
Analysts attribute the lack of significant fund inflows to the post-Bitcoin halving environment. Hong Song-uk, an analyst at NH Investment and Securities, emphasizes the need for upcoming events that focus attention on Bitcoin in the near term.
“There are no follow-up events that focus attention on Bitcoin in the near term,” Hong said.
As of the time of publication, data from Coinglass revealed that approximately $58.2 million worth of Bitcoin was liquidated in the past 24 hours, with long positions accounting for $35 million.
On Wednesday, the Fidelity Bitcoin ETF contributed $5.4 million to the total inflow of $9.8 million for the day. BlackRock’s IBIT fund continued its trend of zero inflows on Thursday, mirroring its performance from the previous day. Other funds that reported no inflows on Thursday include Invesco’s BTCO, VanEck’s HODL, WisdomTree’s BTCW, and Hashdex’s DEFI.
Bitcoin has also seen significant outflows in the Bitcoin exchange-traded funds (ETFs) market, as highlighted in a recent report from SoSoValue dated April 17. Grayscale’s Bitcoin Trust (GBTC) witnessed a net outflow of $79.38 million, contributing to its historical net outflow of $16.46 billion. In contrast, BlackRock’s ETF IBIT saw a net inflow of approximately $25.78 million, indicating a divergent trend in investor sentiment.
Further insights reveal the magnitude of outflows from GBTC, reaching as high as $643 million, while other ETF products experienced modest inflows.
Meanwhile, BlackRock’s 71-day streak of continuous inflows has come to an end, signaling a potential shift in the Bitcoin market and notable turbulence in the exchange-traded funds (ETFs) market.
Preliminary data from Farside Investors shows a significant decline in BlackRock’s IBIT popularity. For the first time since its launch, the fund failed to attract new investments, contrasting with the modest inflows seen in Fidelity’s FBTC and the ARK 21Shares Bitcoin ETF.
At the same time, Grayscale’s GBTC faced substantial withdrawals, resulting in a net outflow of $120.6 million, the largest since April 17.
Despite the initial enthusiasm and heavy investments, the sentiment towards Bitcoin ETFs has cooled off this month, dampening the previous momentum in the Bitcoin market.
As Hong Kong prepares to launch Bitcoin and Ether ETFs by the end of April, aiming to challenge the United States’ dominance in the digital asset space, regulatory hurdles and competition with established U.S. financial giants pose significant challenges.
Moreover, while Fidelity’s Bitcoin ETF recently received a record $40 million investment, concerns persist over low public participation in Bitcoin ETFs, highlighting the growing institutional interest in Bitcoin alongside the challenges hindering broader ETF adoption.
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