Interest from investors in spot Bitcoin exchange-traded funds (ETFs) seems to be declining, as evidenced by outflows totaling $218 million in the past day.

Based on data from Farside Investors, BlackRock's IBIT Bitcoin ETF recorded its second consecutive day of zero flows, while Fidelity's FBTC witnessed its first daily net outflow, amounting to $23 million.

Several other US Bitcoin funds also experienced significant daily outflows. Grayscale's GBTC fund continued its trend of outflows, losing $139.37 million, while Ark Invest and 21Shares' ARKB fund saw $31.34 million exiting. Additionally, Valkyrie's fund experienced outflows of $20.16 million, and Bitwise saw a negative flow of $6 million.

In contrast, Franklin Templeton's EZBC emerged as the sole fund with daily net inflows, attracting $1.87 million.

Despite these outflows, net inflows into the ETFs have surpassed $12 billion since their launch in January.

The reason behind Bitcoin ETF outflows:

Earlier this week, James Butterfill, CoinShares' Head of Research, suggested that these outflows indicate diminishing interest among ETP/ETF investors, driven by speculation about potential delays in rate cuts by the Federal Reserve.

Some market experts view the slowdown as necessary for the market to take a breather. Bloomberg Senior ETF analyst Eric Balchunas noted that Fidelity's FBTC and BlackRock's IBIT had set records for the highest net assets within the first 72 days of launch.

He remarked:

"The league of own-ness of IBIT, FBTC et al shows how overheated it all was, a breather was overdue to be honest."

Fidelity FBTC and BlackRock IBIT are particularly significant as market leaders, collectively managing over $27 billion in assets.

However, there is anticipation surrounding Morgan Stanley's reported plan to allow its 15,000 brokers to recommend spot Bitcoin ETFs to clients, which could potentially reignite interest in the market.