In the lead-up to the release of crucial inflation data and a meeting of the Federal Open Market Committee, investors have pulled back on Bitcoin exchange-traded funds (ETFs), leading to a significant outflow of $200 million. This marks a shift in sentiment, as US spot Bitcoin ETFs had previously experienced a record-breaking 19-day streak of net inflows

The outflow was led by Grayscale's GBTC, which saw $121 million leave the fund, followed by Ark Invest's ARKB, with a net outflow of $56 million ³. Bitwise's BITB, Fidelity, and VanEck also experienced outflows, ranging from $12 million to single-digit millions ³. Other funds, such as BlackRock's IBIT, saw no flows on Tuesday, indicating a broader cautious trend among investors ³.

Despite the recent outflows, these funds have generated a total of $15.42 billion in net inflows since their launch in January ³. Market participants are now closely watching key economic indicators, including the Federal Open Market Committee (FOMC) meeting results and the latest Consumer Price Index (CPI) data, which will be announced today ³.

The CPI, a key measure of inflation, is expected to rise 0.1% from April, signaling a broader disinflationary trend ³. The Federal Reserve's rate-setting meeting is not expected to bring any surprises, with a high probability that the Fed will maintain its current interest rate ³.

The recent outflows from Bitcoin ETFs and the decline in asset value highlight the ongoing market volatility and the need for investors to stay informed about market trends and developments ⁴. The price of Bitcoin has also been affected, briefly plunging to the $66,000 mark as investors try to minimize their investment risks ¹. However, some analysts remain optimistic, pointing out that a decline in the US inflation rate could bring bullish winds for Crypto.