Institutional Arbitrage Strategy Liquidation Intensifies, U.S. Bitcoin Spot ETF Records $1 Billion Daily Outflow
The outflow amount of Bitcoin spot ETFs in the United States has reached a historical high of $1 billion in a single day, with net outflows exceeding $2 billion for six consecutive trading days. Analysts believe that profit-taking by institutions, the exit of arbitrage trading, and shifts in market risk sentiment are the main causes. At the same time, Bitcoin has fallen below $90,000, and other cryptocurrencies like Ethereum have also been affected, casting a short-term shadow over the market.
**BTC ETF sees record single-day outflow, with 10 funds leading the charge**
Data from SoSoValue shows that out of the 12 Bitcoin spot ETFs in the United States, 10 experienced net outflows. Among them, Fidelity’s FBTC faced the largest outflow, with $345 million flowing out in a single day, followed by BlackRock’s IBIT, which saw an outflow of $164 million.
Other funds also faced significant outflows, such as Valkyrie’s BRRR with approximately $100 million, Bitwise’s BITB with about $88.3 million, and Grayscale’s BTC with around $85 million. Meanwhile, the ARKB fund, launched jointly by Ark Invest and 21Shares, has yet to disclose its fund flow data, suggesting that the actual outflow amount may be even higher.
This outflow record breaks the previous record of $671 million set on December 19 of last year. At that time, the price of Bitcoin quickly retraced from its historical high of $108,000, and this latest outflow is similarly accompanied by a significant market drop, with Bitcoin’s price now having fallen to around $88,000, the lowest level since before the election of former U.S. President Donald Trump.
Furthermore, this marks the first time that Bitcoin spot ETFs have faced net outflows exceeding $500 million for three consecutive weeks, indicating a gradual loss of investor confidence.
**Institutions take profits, Bitcoin market faces pressure**
In addition to Bitcoin, the overall cryptocurrency market is also experiencing selling pressure, with major tokens like ETH, XRP, and SOL seeing more pronounced declines. Peter Chung, head of research at Presto Research, points out that this market downturn is closely related to a decrease in risk appetite in the global financial markets:
“Bitcoin’s drop below $90,000 aligns with broader trends in risk aversion. This is reflected in weakening Nasdaq futures, a strengthening yen, and stable yields on 10-year U.S. Treasury bonds.”
Chung further explains that traditional financial (TradFi) hedge funds have recently adopted arbitrage trading strategies en masse: “Buying Bitcoin ETFs while shorting CME Bitcoin futures to capture about a 10% spread.”
However, as the returns on this strategy have shrunk to 5%, many institutions have chosen to close their positions, which could trigger a large-scale outflow of funds.
**(Arthur Hayes warns: Hedge funds taking profits could cause Bitcoin to drop to $70,000)**
**Institutional investors adjust strategies, while others remain cautious**
BTC Markets analyst Rachael Lucas believes multiple factors have led to the outflows from ETFs, with institutional investors’ position adjustments being a significant key:
“Bitcoin performed strongly at the beginning of 2024, leading some investors to take profits. After such a significant rise, increased market volatility makes it a natural choice for investors to lock in gains.”
Moreover, macroeconomic factors are also affecting market sentiment, including uncertainties in U.S.-China trade relations and expectations regarding the Federal Reserve’s interest rate policies, causing investors to adopt a cautious stance towards potential rising capital costs.
**(Is the ‘Trump Boom’ cooling off? Market turmoil raises concerns about a ‘Trump recession’)**
**Analysts: Liquidity tightening, but long-term outlook remains bullish**
As of now, the cumulative net inflow of Bitcoin spot ETFs in the U.S. has fallen to $38 billion, marking the lowest level this year and reflecting a contraction in market liquidity, which is likely to increase volatility.
Nevertheless, Lucas remains optimistic, believing that the supply reduction from the Bitcoin halving event will ultimately provide strong structural support:
“In the short term, ETF outflows may pressure Bitcoin prices, but fundamentally, they are unlikely to cause a long-term trend reversal, as Bitcoin’s price is influenced by a combination of spot demand, on-chain activity, derivatives market trends, and macroeconomic factors.”
**Risk Warning**
Investing in cryptocurrencies carries a high level of risk, and their prices can be extremely volatile, potentially resulting in the loss of your entire principal. Please assess the risks carefully.
