Cathie Wood’s ARK 21Shares Bitcoin exchange-traded fund (ETF) saw daily outflows of $87 million, surpassing Grayscale’s Bitcoin Trust (GBTC) for the first time. ARKB lost $87.5 million on Tuesday, equivalent to around 1,300 BTC, marking the second consecutive day of outflows. GBTC also experienced consistent outflows of $81.9 million daily since its conversion to a spot ETF, totaling $15.1 billion in the past three months. However, BlackRock’s fund saw an inflow of $150.5 million, resulting in a net aggregate inflow of $40.3 million for the day.
Despite outflows, ARKB is the third-largest among newly launched spot ETFs with $2.2 billion in assets under management (AUM), trailing behind BlackRock and Fidelity’s funds. In terms of Bitcoin holdings, ARKB is the sixth-largest holder among funds, corporations, and miners, owning 44,662 BTC. On the other hand, GBTC remains the leader with around 329,000 Bitcoin on its books, despite shedding 291,000 since its conversion. The recent drop in Bitcoin’s price, falling 9% from last week’s high of $71,500, coincided with increased outflows from ETFs.
The introduction of the first-ever 2x and -2x leveraged spot Bitcoin ETFs, trading under the tickers BITU and SBIT, added to the market dynamics. These ETFs are expected to be among the top 5 most volatile in the US, with a standard deviation of around 150%. Bloomberg ETF analyst Eric Balchunas also noted a significant increase in Bitcoin ETF trading volume, reaching around $111 billion in March, nearly tripling the combined volume of February and January. Digital asset investment products saw a positive turnaround in sentiment last week with inflows totaling $862 million, almost fully recovering from the record outflows of $931 million in the prior week, with Bitcoin products attracting most of the inflows.
In terms of jurisdictions, the United States saw an additional $897 million in inflows, while Europe and Canada combined experienced outflows of $49 million. Grayscale experienced outflows of $967 million during the same period. The market dynamics have been influenced by the recent decline in Bitcoin’s price and the introduction of leveraged spot Bitcoin ETFs, contributing to increased volatility and trading volumes in the market. The competition among ETFs, along with shifting investor sentiment and inflow/outflow patterns, highlights the continued evolution and growth of the cryptocurrency market and its investment products. Overall, while some funds have seen outflows, others have continued to attract inflows, indicating a diverse range of strategies and preferences among investors in the digital asset space.
