After eight straight weeks of outflows totaling $8 billion, Bitcoin ETFs finally caught a break.
The products pulled in roughly $510 million over the last three days — the first meaningful inflows since the sell-off began in early May. James Butterfill, head of research at CoinShares, told Decrypt it’s the “largest run of outflows we’ve ever seen,” but added that sentiment might be shifting.
“It looks like sentiment might be turning a corner,” he said. “These are the largest inflows we’ve seen since the outflows began.”
The bleeding was brutal. Year-to-date outflows hit $2.8 billion. Bitcoin itself dropped to $58,000 earlier this month, down from its $126,000 October peak. It’s now hovering around $62,000.
Butterfill noted that the $8 billion drawdown represents about 8% of total assets under management for Bitcoin ETFs — similar to the proportional outflows seen during cycle lows in 2018. He said the source of negative price pressure from large holders, or “whales,” has started to ease after they sold more than $40 billion in Bitcoin since last year’s peak.
The average Bitcoin ETF buyer is still underwater. Based on Glassnode data, the average cost basis is around $83,800.
Butterfill warned that the Fed’s ongoing fight against inflation could keep Bitcoin from breaking out. “We’re not in a situation where we can say the Fed is on the cusp of cutting rates, and that would be very supportive to Bitcoin.”
Still, three green days in a row is something. After eight weeks of red, the market will take it.
