Investors Reverse Course After Prolonged Outflows
After nearly ten consecutive days of withdrawals, U.S.-listed spot bitcoin ETFs witnessed a dramatic reversal on Monday. Investors poured $561.8 million into these funds, marking the largest single-day net inflow since January 14. This influx ended a four-day streak of outflows that had seen $1.5 billion leave spot bitcoin ETFs just last week. The abrupt turnaround comes as bitcoin's price tumbled from highs near $98,000 to a low below $75,000, presenting what some traders viewed as an opportunity to buy at a discount.
On paper, the recent inflows suggest renewed confidence—but the year-to-date picture remains negative. As of Tuesday, spot bitcoin ETFs still showed $1 billion in net outflows for 2024, with total outflows reaching $4.6 billion and only $3.6 billion in offsetting inflows over the same period.
Spot bitcoin ETFs now account for about 1.3 million BTC in assets under management, down from the October 2023 peak of 1.37 million BTC.
BlackRock and Fidelity Lead Fresh Surge
The recent surge was not evenly distributed among all 11 U.S.-listed bitcoin ETFs. BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s FBTC stood out as top beneficiaries, attracting $142 million and $153.3 million in inflows respectively on Monday. This renewed interest follows several weeks where even major players saw consistent redemptions.
Meanwhile, Grayscale’s Bitcoin Trust posted weekly outflows of $119 million, highlighting ongoing divergence between ETF providers.
Despite strong daily inflows for IBIT and FBTC, it is uncertain whether this momentum will persist or if it merely reflects opportunistic buying after sharp price declines.
ETF Holdings Dip Below October Peak
Spot bitcoin ETFs now collectively hold about 1.3 million BTC in assets under management—a figure roughly 5% lower than their October peak of 1.37 million BTC. This reduction underscores the impact of recent outflows and suggests that while Monday’s inflow was significant, it has not yet reversed the broader trend of diminished holdings across these products.
According to coindesk.com, these shifts in ETF holdings have coincided with notable volatility in bitcoin prices, which hit a year-to-date low of $74,555 on Monday before rebounding above $79,000 later that day.
$1.5 Billion Out Last Week—Now What?
Last week’s exodus of $1.5 billion from U.S.-listed spot bitcoin ETFs was mirrored globally; exchange-traded products tracking bitcoin saw net outflows totaling $1.35 billion worldwide over the same period. Notably, Galaxy Digital’s research head pointed out that bitcoin traded up to 10% below the average cost basis for U.S. ETF holders—calculated at around $84,099—during the weekend selloff.
This gap between current market price (near $78,000) and average ETF entry point leaves many investors underwater for now. Historically, such conditions have sometimes led to further selling as holders cut losses or wait for a recovery back above their initial investment levels.
Yet technical indicators like the daily Relative Strength Index (RSI) dropping into the low 20s—a zone often followed by rebounds—suggest potential for short-term reversals even amid broader uncertainty.
Cost Basis Gap Raises Investor Risks
The average cost basis across U.S.-listed spot bitcoin ETFs stands at approximately $84,099 per BTC, while spot prices remain about 7% lower than that mark as of early this week. Over the weekend, this gap widened to as much as 10%, intensifying pressure on recent buyers who may be facing unrealized losses.
It is unclear whether Monday’s record inflow signals a longer-term shift or is simply a reaction to perceived “fire-sale” conditions after a steep drawdown from all-time highs—a drop measured at roughly 40% from peak levels.
Quick Recap
- •U.S.-listed bitcoin ETFs saw $561.8 million in inflows on Monday, the largest single-day net inflow since January 14.
- •Year-to-date, spot bitcoin ETFs have $1 billion in net outflows as of Tuesday, with $4.6 billion out and $3.6 billion in.
- •BlackRock’s IBIT and Fidelity’s FBTC led Monday’s surge with $142 million and $153.3 million in inflows, respectively.
What could influence sentiment
If U.S.-listed bitcoin ETFs sustain inflows above Monday’s $561.8 million—the largest since January 14—after last week’s $1.5 billion in outflows, it would immediately signal renewed institutional demand following a near ten-day outflow streak; however, whether this reversal persists remains unclear.