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Bitcoin ETFs See Record $937M Outflows Amid Market Drop
The Bitcoin market experienced a significant downturn as the U.S. spot Bitcoin exchange-traded funds (ETFs) recorded their largest daily negative withdrawal in history, with a staggering $937.9 million being withdrawn on February 25.
According to recent data provided by CoinGlass, this marks six consecutive days of outflows from these ETFs. Fidelity’s FBTC led the charge with a massive $344.7 million withdrawal, followed closely by BlackRock’s IBIT, which lost $164.4 million.
As a result, Bitcoin itself fell 3.4% to trade at $86,140, as ETF redemptions and market fears put pressure on prices. This significant drop in the cryptocurrency’s value highlights a crucial change in market perception, with investors growing increasingly wary of this volatile asset.
It is worth noting that Fidelity Wise Origin Bitcoin Fund (FBTC) suffered the largest withdrawal, followed by BlackRock’s iShares Bitcoin Trust (IBIT), which lost $164.4 million. It was not just these two ETFs that experienced substantial outflows; many others also saw investors taking their money elsewhere.
The reason behind this unprecedented shift in market sentiment is linked to changes observed in the carry trade market. The CME Bitcoin futures premium reduction has eliminated most of the profitability for the spot ETF and futures trade strategy, rendering them less attractive options for investors.
As a result, Bitcoin futures have lost their popularity as carry trade instruments since they yield less than U.S. 10-year treasury notes. This loss of interest in Bitcoin ETFs and futures is expected to further exacerbate market uncertainties.
In conclusion, it appears that the current market situation has led to increased fear, uncertainty, and doubt (FUD) among investors. The recent data suggests that the market is now at extreme levels of fear, with many predicting a significant decline in the value of Bitcoin if this trend continues.
It’s clear that the cryptocurrency space is extremely volatile right now, and it’s crucial for traders to remain vigilant and stay up-to-date on all market developments.
Source: https://cryptotale.org/bitcoin-etfs-see-record-937m-outflows-amid-market-drop/
