Bitcoin spot exchange-traded funds (ETFs) have seen their first net outflows in nearly a month, marking a significant shift in investor sentiment. The 11 U.S. spot Bitcoin ETFs collectively experienced a net outflow of $64.9 million, following a remarkable streak of 19 consecutive days of net inflows.

Key Highlights

Grayscale Bitcoin Trust (GBTC): The largest net outflow of $39.5 million.

Invesco Galaxy Bitcoin ETF (BTCO): Second-largest net outflow of $20.5 million.

Fidelity Wise Origin Bitcoin Fund (FBTC): Minor outflow of $3 million.

Bitwise and BlackRock’s ETFs: Modest inflows of $7.6 million and $6.3 million, respectively.

Market Reaction

The outflows coincided with a decline in the price of Bitcoin, which dropped from $70,000 to below $68,000 over the past 12 hours. This resulted in $170 million in liquidations and downward pressure on the entire cryptocurrency market.

Recent Trends

In the preceding week, BTC spot ETFs had consistently observed strong inflows, with net inflows recorded on each trading day. The total net inflow for the week amounted to approximately $1.83 billion, reaching levels of demand not seen since early March. The cumulative net inflow since the inception of these ETFs has now reached a record high of about $15.7 billion.

Global Integration

The integration of Bitcoin into traditional finance is expanding globally. Following the launch of Australia’s first BTC spot ETF, the Thailand Securities and Exchange Commission (SEC) recently approved One Asset Management to introduce Thailand’s inaugural BTC spot ETF.

Central Bank Rate Cuts

Both the Bank of Canada (BOC) and the European Central Bank (ECB) have cut interest rates by 25 basis points. Despite inflation levels surpassing the central banks’ 2% annual target, these rate cuts indicate governments’ optimistic expectations about their ability to manage inflation while implementing less restrictive monetary policies.

Inflation and Monetary Policy

The U.S. Bureau of Labor Statistics is set to release May figures for its inflation-measuring Consumer Price Index (CPI) on June 11. Analysts have forecast inflation to rise 0.1% after a 0.5% bump in April, bringing the year-on-year figure to 3.4% with core inflation forecast to rise 0.3% in May, the same as April. The Fed’s monetary policy is also to be decided at a two-day Federal Open Market Committee (FOMC) meeting starting the same day.

Conclusion

The recent outflows from Bitcoin spot ETFs and the decline in Bitcoin price suggest a shift in investor sentiment. However, the integration of Bitcoin into traditional finance and the central banks’ optimistic expectations about managing inflation could continue to support the cryptocurrency market.