U.S. Bitcoin ETF Outflows Jump Past $560 Million, More Pain Ahead?

Outflows from U.S. spot Bitcoin ETFs surged past $500 million on Wednesday, May 1, intensifying selling pressure. This increase occurred following the FOMC meeting, during which Fed Chair Jerome Powell announced unchanged interest rates, causing Bitcoin’s price to drop an additional 5% to $57,500.

Fidelity Bitcoin ETF Outflows Beat Grayscale’s

As per data from Farside investors, the net outflows from spot Bitcoin ETFs on Wednesday were $563.7 million. BlackRock Bitcoin ETF IBIT registered the first outflow since the inception of $37 million. On the other hand, Fidelity’s FBTC recorded the highest outflows at $191 million beating Grayscale’s GBTC at $167 million. For the very first time, all of the nine spot Bitcoin ETFs in the US registered net outflows in a single day.

On Wednesday, the price of Bitcoin ETFs witnessed one of the largest discounts on the underlying assets. Discounts for some of the top Bitcoin ETFs like BlackRock’s IBIT have surged as high as nearly 1.8%. Other Bitcoin ETFs also showed discounts in a similar range.

James Seyffart, an ETF analyst at Bloomberg Intelligence, remarked that it would have been more worrisome if the discounts were confined to a single fund. He added:

“That’s not a great look. It’s a little out of the ordinary in the fact that we’ve seen premiums and discounts in the range of -1% to +1% and this is bigger. But it’s not groundbreaking.”

Bitwise President Teddy Fusaro commented on the recent market volatility, noting that such dislocations are likely during periods of high market turbulence. He mentioned that these occurrences are typically brief and common, often happening in the final moments of trading.

Fusaro highlighted that earlier in Wednesday’s trading session, all ETFs were trading close to their estimated Net Asset Value (NAV). He further stated that slight premiums or discounts to NAV are expected, depending on market conditions and the balance of buying and selling activities.

BTC Price Collapse to $50,000 Likely?

There’s been solid selling pressure recently as the Bitcoin price has been breaking down under all support zones recently. Also, the next support zone for Bitcoin is currently at its 200-day EMA somewhere around $52,000. However, if the BTC price fails to hold this support, it could further plummet all the way down under $50,000, and even to $42,000, as per some market analysts.

#Bitcoin staying above $42,000 is all that matters.

I'm not saying price goes that low or even close.

It's just my high time frame bull/bear line.

— Nebraskangooner (@Nebraskangooner) May 1, 2024