Record Bitcoin-ETF Outflow Buffets BlackRock, Fidelity Funds

(Bloomberg) — U.S. spot Bitcoin exchange-traded funds experienced their biggest daily outflow as the digital token heads into its worst week since August 2023.

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Investors withdrew a net $564 million from the group of nearly a dozen funds on Wednesday; this was the biggest drop since the products launched in January. The prospect of interest rates being higher for longer has hurt risky assets like crypto.

BlackRock Inc. and Fidelity Investments were previously part of a historically successful launch of a new fund category. Money poured in and Bitcoin soared to a near all-time high of $74,000 in March.

The group still has net inflows of more than $11 billion to date, but demand has fallen recently as financial conditions tightened in the US, where the Federal Reserve faces the challenge of tackling sticky inflation.

“This is a snapshot in time,” said Caroline Bowler, CEO of crypto exchange BTC Markets Pty. “There has been a contraction in Bitcoin and outflows from ETFs, but the overall picture is healthy in terms of ETF demand in different countries. geographies.”

Hong Kong this week listed its first ETFs that invest directly in Bitcoin and Ether, but the development failed to ease the sentiment in crypto markets.

A net $191 million left the Fidelity Wise Origin Bitcoin Fund on Wednesday; This was the portfolio’s highest daily net outflow ever. BlackRock’s iShares Bitcoin Trust experienced its first-ever drop of $37 million. Investors withdrew $167 million from Grayscale Bitcoin Trust, the largest spot Bitcoin ETF.

Bitcoin fell 23% from its last record on March 14, falling to a two-month low reached on Wednesday. The original cryptocurrency rebounded on Thursday after three consecutive days of declines. It was trading near the $58,600 level at 9 a.m. New York time.

(Updates on Bitcoin price performance in last paragraph.)

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