U.S.-listed Bitcoin exchange-traded funds (ETFs) saw net outflows totaling $71 million on Thursday, marking the third straight day of declines. This trend indicates a shift among professional investors, who appear to be exiting the market as Bitcoin’s recent rally fizzles out.
Bitcoin’s price has been sliding for a week, dropping below $59,000 early Friday. Over the past 24 hours, the cryptocurrency lost just over 1%, bringing its weekly losses to more than 3.5%. With August coming to a close, Bitcoin is on track for an 8% monthly decline, reflecting overall weak demand growth, which has recently turned negative.
Key Players in the Outflow
Among the biggest contributors to Thursday’s outflows were Fidelity’s FBTC, which saw $31 million withdrawn, and Grayscale’s GBTC, with $22 million in outflows. A notable development was BlackRock’s IBIT fund, the world’s largest Bitcoin ETF by assets under management, which recorded a $13 million outflow for only the second time in its history.
Despite these outflows, there has been an increase in demand from U.S. retail investors. Data shows a rise in the Bitcoin price premium on Coinbase, reaching its highest level since July. Additionally, Bitcoin is flowing from exchanges outside the U.S. to Coinbase, a sign of growing interest from American investors. Historically, this trend has been linked to rising prices.
Market Volatility on the Horizon
While Bitcoin has traded relatively sideways over the past week, with only minor fluctuations of around +/- 1.5%, traders anticipate that market volatility will pick up in the coming weeks. The Labor Day holiday and the upcoming non-farm payroll (NFP) report are expected to reignite market activity as the fall season approaches.
Augustine Fan, head of insights at SOFA, noted in a client update that the market has been quiet, but action is expected to increase after Labor Day. He also highlighted that political developments, particularly plans to raise taxes, could start to influence the broader crypto market.
Traders at QCP Capital in Singapore echoed this sentiment, predicting choppy price action and continued caution. They pointed out that risk reversals until October are skewed towards puts in both Bitcoin and Ethereum, indicating a market wary of potential downside.
Federal Reserve Chair Jerome Powell recently confirmed a shift toward lowering borrowing costs, a move that typically boosts bullish sentiment among traders. However, in the absence of immediate catalysts, QCP Capital expects prices to continue fluctuating within a range as September begins.
