Regulation
Bitcoin ETF Reversal Price: $65M Outflow Ends Streak
In recent developments within the US financial sector, the unprecedented 19-day streak of consistent net inflows into US-listed Bitcoin spot exchange-traded funds (ETFs) ended abruptly on Monday.
According to preliminary figures, the products saw combined net outflows of $65 million, marking a significant shift in investor sentiment. This halt in inflows ended a period of accumulation that last saw a decline on May 10, when the 11 spot Bitcoin ETFs collectively saw $85 million withdrawn.
Bitcoin Performance Amid Market Fluctuations
Grayscale’s Bitcoin Trust (GBTC) led the downturn with $40 million in outflows on June 10, continuing its rocky trajectory as the Bitcoin ETF with the highest cumulative outflows since its launch in January.
To date, GBTC has accumulated an alarming $18 billion in total outflows. In contrast, the combined group of 11 spot Bitcoin ETFs have seen nearly $16 billion in net inflows since their inception earlier this year, illustrating a stark contrast between the performance of individual funds and the overall interest in the walk.
Other funds also felt the pressure on Monday, with Invesco and Galaxy Digital’s BTCO ETF and Valkyrie Digital Assets’ BRRR ETF seeing outflows of $20.5 million and $15.8 million, respectively.
However, not all funds were subject to withdrawals. BlackRock’s IBIT, the largest spot BTC ETF by assets under management, reported modest net inflows of $6 million, and Bitwise’s BITB saw an inflow of $8 million.
Bitcoin ETF Feed
The timing of these changes correlates with a notable drop in the market value of Bitcoin, which fell 4.3% over the past 24 hours, hitting a low of $66,207 according to CoinGecko.
This decline is part of a broader collapse in the cryptocurrency market, which has also seen significant losses in major alternative cryptocurrencies (altcoins) such as Ether (ETH), Solana SOL, XRP of Ripple and Dogecoin (DOGE).
Market analysts attribute the declines to heightened investor anxiety ahead of the U.S. Bureau of Labor Statistics’ upcoming release of May Consumer Price Index (CPI) figures on June 11. , a key indicator of inflation.
In addition, the Federal Reserve’s monetary policy decisions, expected at the end of the meeting of the Federal Open Market Committee (FOMC) which opens today, also play a crucial role in the development of market expectations.
Regulatory developments in the field of cryptocurrencies
Alongside these market dynamics, the cryptocurrency investment community is closely monitoring the regulatory landscape, particularly the actions of the United States Securities and Exchange Commission (SEC).
The SEC is currently reviewing S-1 registration statements from asset managers aspiring to launch of Ethereum ETFs. This review follows the SEC’s approval of 19b-4 filings on May 23, paving the way for these new investment products.
Potential Ethereum spot ETF issuers are eagerly awaiting feedback on their initial S-1 releases submitted on May 31. Although they expect to receive comments by June 7, based on previous discussions with the agency, at least two issuers report that no feedback has been received. date.
SEC Chairman Gary Gensler indicated in a June 6 interview with CNBC that the review and approval process would be thorough and lengthy, possibly requiring several rounds of reviews before final approvals are granted.
This scrutiny from the SEC highlights regulatory hurdles and challenges cautious approach taken towards new cryptocurrencies some products.
Notably, BlackRock announced plans to endow its ETF with $10 million, and Franklin Templeton aims to introduce its product with a competitive fee of 0.19%.
These preparations suggest strategic positioning of these companies to capitalize on potential opportunities similar to those seen with the introduction of spot Bitcoin ETFs.
As the cryptocurrency industry faces regulatory complexities and fluctuating market conditions, the financial community remains closely attentive to upcoming decisions from the SEC.
These decisions will undoubtedly play a crucial role in shaping the future cryptocurrency investment landscape in the United States.