Dramatically speaking, US-spot Bitcoin ETFs have recorded an enormous outflow of $1.3 billion in the last two weeks. This is not just money; it is a statement of how cryptocurrency investors respond to Bitcoin's price tumble, now lingering at $60,000. One of the primary culprits in this exodus appears to be Grayscale's GBTC, which accounted for $517.3 million of outflows alone. It's unbelievable to see so much outflow, and it indeed makes one think about the broader implications for the market.
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Knowing that Bitcoin's price has tumbled 7.6 percent over the week and 12 percent over this month, some jitters are understandable. When the market is dipping, as in this case, it is not hard to question positions, even for the most stalwart believers. Farside Investors provided some provisional data that paints a bleak picture for June 24, 2024. In just one day, they reported a total outflow of $174.5 million, with Grayscale continuing to lead the pack at $90.4 million in outflows. Other ETFs, like FBTC, BITB, ARKB, and others, also saw considerable outflows, suggesting that market sentiment is broadly negative.
One may ask, Why now? The easy answer lies in the fall of Bitcoin's price. When BTC goes down, as in this case, a selling pressure sequentially works its way through, forcing holders of related investment instruments, such as ETFs, to sell their positions. It is an old story of fear riding market sentiment.
In that backdrop, voices from within stay strong and optimistic. Take the case of Michael Saylor, co-founder of MicroStrategy. He recently repeated his belief in Bitcoin's long-term potential to go as high as a staggering $10 million one day. Now, this is a bold claim when you consider that MicroStrategy itself holds 214,400 BTC.
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Looking beyond the immediate outflows, there will be some exciting developments shortly. For example, Metaplanet, a Japanese investment consultancy, plans to raise 6 million USD by selling bonds to investors to purchase more Bitcoin. This is an example of how some institutional investors still have big bets on the prospects of Bitcoin in the future despite its current downturn.
What's interesting is how Goldman Sachs has changed its mind about the Bitcoin ETFs. Only a few months ago, they were very skeptical, but now they have familiarized themselves with the fact that an SEC-approved Bitcoin ETF will have a substantial psychological effect on the market. This paradigm shift from skepticism to acceptance by a major player on Wall Street, like Goldman Sachs, might well show a change in how the financial industry at large relates to its view on cryptocurrencies.
Where does all this leave us? Recent outflows are an indictment of the volatility within the cryptocurrency market; however, they also point out one continuous belief in the potential of Bitcoin from some sections of the investment community. Though fear and uncertainty have been at the core when attempting to draw out short-term trends, long-term holders continue to see it as a revolutionary asset.