Examining The Bold Downfall of Bitcoin ETFs Within a Month

Key Points

• April marked a challenging month for spot Bitcoin ETFs with significant outflows.
• Despite slowdowns and outflows, these ETFs have still managed to accumulate substantial capital.

April was a difficult month for spot Bitcoin ETFs, but they remain largely successful.

Outflows from New Funds

Previously, Grayscale, a trust-converted fund, was the primary source of capital flight from the ETFs. However, the newly launched ETFs also started to experience outflows. On April 2, Ark Invest and 21Shares’ ARKB, the third largest of the new ETFs by AUM, saw $87.5 million pulled. This fund also experienced outflows on April 16-17 and April 25.

Bitwise’s BITB also had two days of outflows in April, but they only totaled $13.3 million. Fidelity’s FBTC saw $22.6 million outflows on April 25.

Changing Sentiment

BlackRock’s IBIT, the most successful of the new ETFs, has not yet seen daily outflows but did register $0 worth of flows on April 24, ending its 71-day inflow streak. This ETF’s 70 days of consecutive inflows led to it being among the top 10 funds with the longest streaks of money pouring in.

Despite the cut off in inflows, IBIT still leads in terms of AUM after 72 days, standing at $17.6 billion. FBTC is second on the list, and ARKB and BITB are both in the top 10. Despite slowing inflows and, in some cases, outflows, these funds have managed to amass significant levels of capital in their first few months on the market.

Bloomberg’s ETF analysts, James Seyffart and Eric Balchunas, have both stated online that this trend is normal. Seyffart discussed the commonality of ETFs tracking no flows, and when many expressed concern when ARKB first showed outflows, they clarified that outflows are also typical in mature ETFs.

The slowdown in flows could be due to the more tepid Bitcoin market in general. Bitcoin’s 30-day annualized volatility has fallen below 50% this month, lower than the 81% reached in late March after Bitcoin reached new highs. As the fervor in the Bitcoin market lessens, it has affected ETF activity.