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Spot Bitcoin ETF flows decline as the price of cryptocurrencies falls
ETF investment instruments
After rallying for weeks, flows into spot bitcoin ETFs have sunk into negative territory on three of the last four days as the price of the asset it is based on has collapsed.
According to research by UK-based asset manager Farside Investors, the 11 funds totaled outflows of more than $300 million in the week. Tuesday’s outflows broke a 19-day streak of inflows for products as young as five months old that track the largest cryptocurrency by market capitalization.
Grayscale Bitcoin Trust (GBTC) outflows totaled more than $226 million in outflows, the most among spot bitcoin ETFs. The fund, a conversion from a trust, carries the highest fee among the products. But very successful Fidelity Wise Origin Bitcoin Fund (FBTC) also recorded rare outflows on three separate days amounting to more than $116 million, including $106 million on Thursday. The fund has generated more than $9.5 million in inflows since its debut on January 11.
Even the BlackRock Bitcoin Trust (IBIT)which amassed spot assets of $17.6 billion, received only mild interest, generating just $38 million in inflows for the week.
etf.com: FBTC flows
On June 4, spot Bitcoin ETFs generated $886 million in inflows, the second-highest total in the funds’ history. and $1.8 billion in inflows for the week.
According to cryptocurrency market data provider CoinMarketCap, Bitcoin’s price fell more than 7% in seven days to around $65,000, its lowest level in a month. The decline is likely the result of miners selling stakes to improve their balance sheets and, to a lesser extent, profit-taking among large investors, market watchers say.
“BTC spot ETF flows often tend to be a function of price,” wrote analyst Noelle Acheson, author of the Crypto Is Macro Now newsletter, via Telegram on etf.com. She added that miners were “probably” responsible for the pressure on bitcoin selling.
“This is a typical feature of the post-halving cycle, as unprofitable miners shut down their machines and sell BTC reserves, while optimistic miners who want to wait for the market to recover might sell BTC to cover operating expenses.”
The drop in Bitcoin prices
Transfers from mining pools to Binance, the world’s largest cryptocurrency exchange, hit a 2-month high of more than 3,000 bitcoins on June 9, according to data from analytics firm CryptoQuant. “This change is in line with a price correction, which sent #Bitcoin down to $66,000,” the company wrote in an X post on Thursday.
The firm separately noted that miners sold another 1,200 bitcoins via counters on June 10, “the highest daily volume in over two months.”
The story continues
The movement of tokens to trading platforms generally signals that digital asset holders are looking to sell.
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