bitcoin ETF Outflows Exceed $1 Billion in U.S. Markets
U.S. spot bitcoin exchange-traded funds (ETFs) have seen a substantial net outflow of over $1 billion over a seven-day period from August 27 to September 5, marking a significant downturn in investor sentiment.
Leading the decline was Fidelity’s Wise Origin bitcoin Fund (FBTC), which witnessed $374 million in withdrawals during the week. Following closely behind was Grayscale’s bitcoin ETF (GBTC) with $227 million in outflows, as reported by data from Farside Investors.
Even BlackRock’s iShares bitcoin Trust (IBIT), the largest bitcoin ETF globally, experienced its second-ever outflow since its launch in January, losing $13.5 million on August 29.
IBIT ETF Inflows Stagnate Amid Market Challenges
Despite seeing strong inflows in the weeks leading up to this period, the IBIT ETF saw no further activity during these seven days, suggesting a stagnant market environment.
Other U.S. bitcoin ETFs also faced losses, with WisdomTree’s bitcoin Fund (BTCW) being the sole exception, showing no significant inflows or outflows during the same period.
The decline in bitcoin ETF activity coincided with a drop in bitcoin's price, which fell over 4% last week, currently hovering around $56,500.
Analysts attribute part of the price drop to persistent ETF outflows and increasing concerns over global market instability, highlighting the interconnected nature of cryptocurrency markets with broader economic trends.
On September 5, bitcoin funds saw a $211 million outflow, marking the fourth-highest daily loss since May 1 and reflecting ongoing market uncertainties.
Despite efforts to break through the $65,000 resistance level, bitcoin has faced selling pressure, particularly from short-term investors, further compounded by a prevailing sense of fear in the market.
Additionally, ethereum spot ETFs also experienced outflows, with Grayscale’s ethereum ETF (ETHE) losing $7.39 million on September 5, while its mini ETF recorded a slight inflow of $7.24 million.
Digital asset investment products collectively faced significant outflows last week, totaling $305 million, underscoring the prevailing negative sentiment affecting the cryptocurrency market globally.
bitcoin Network Activity Hits Three-Year Low
The bitcoin network has witnessed a notable decrease in activity, reaching levels not observed in three years, according to data from onchain analytics platform CryptoQuant.
A general sense of disinterest has permeated the crypto market, with bitcoin transaction volumes notably declining, reflecting a broader trend of waning interest in cryptocurrency activities.
Active addresses on the bitcoin network, which peaked at nearly 1.2 million in mid-March, have dropped to 838,000, signaling a significant decrease in network engagement.
By late August, this figure further decreased to 744,000, marking the lowest daily count since 2021 and hinting at a lack of interest in utilizing the network for transactions.
As network activity dwindles, with fewer transactions taking place, the crypto market faces challenges in sustaining momentum and attracting new participants amid evolving economic conditions and market dynamics.
