Source: Zhitong Finance
Bitcoin continues its decline.
Bitcoin continued to decline as investors' expectations of interest rate cuts from the Federal Reserve cooled down and the world's largest Bitcoin exchange-traded fund (ETF) recorded a record outflow in a single day. As of press time, Bitcoin is down about 3% to $65,380. Other major coins, such as Ethereum, Solana, and Dogecoin, also experienced declines.
According to data compiled by Bloomberg, the $25 billion Grayscale Bitcoin Trust (GBTC) generated $643 million a week, the largest outflow since switching to an ETF on January 11. Earlier, strong demand for nine newly listed spot Bitcoin ETFs was enough to make up for the massive outflow of money from GBTC.
However, capital inflows into giant products such as Fidelity and BlackRock are also declining. On March 18, these 10 ETFs had a total net outflow of US$154 million.
Cryptocurrency trading firm QCP Capital said in a report Tuesday that it will “keep a close eye on today's total ETF flow data,” adding that “a net negative value would be a clear bearish sign.”
Since spot Bitcoin ETFs began trading, they have attracted a total of $12 billion in net investment. Investor interest propelled Bitcoin to an all-time high of $7,3798 last week. Since then, as demand for these products has gradually waned, some market players have warned of asset bubbles.
The risk posed by monetary policy is one of the uncertainties. Continued inflationary pressure is dampening expectations of the Federal Reserve's easing policy, while Japan has just ended its negative interest rate policy.
GBTC's management company Grayscale Investments plans to launch a fund similar to GBTC to compete with competitors offering cheaper products. A person familiar with the matter said earlier that the fee is expected to be lower than GBTC.