Days after suffering devastating losses that dragged its price to $56,500, bitcoin rebounded on Thursday and during the early hours of Friday. This coincided with a slowdown in outflows from spot bitcoin exchange-traded funds (ETFs) in the US compared to the previous day’s record outflows.
According to the latest data compiled by SoSoValue, spot bitcoin ETFs saw a net outflow of $34.4 million on May 2nd.
Bitcoin ETFs Experience Slower Outflows
BlackRock’s IBIT and Fidelity’s FBTC, the second and third-largest BTC funds by total net assets, had no new flows on Thursday. A similar trend was seen across Bitwise’s BITB, VanEck’s HODL, and WisdomTree’s BTCW which recorded no flow.
However, Bloomberg’s prominent ETF analyst James Seyffart had previously noted that having days of zero inflows is completely normal and shouldn’t be misinterpreted as a failure of the products themselves.
Meanwhile, Grayscale’s GBTC, which has been notoriously experiencing outflows, was the only ETF to see a net outflow on Thursday, totaling $55 million, as per SoSoValue.
On the other hand, Ark Invest’s ARKB led daily net inflows added 13 million. Other spot bitcoin ETFs from Franklin Templeton’s EZBC, Valkyrie’s BRRR, and Invesco and Galaxy Digital’s BTCO recorded $3 million, $2 million, and $1 million in inflows respectively, thereby totaling $6 million combined.
This comes a day after the market saw a record level of outflows for these investment vehicles, registering the largest ever at over $563 million. Fidelity’s FBTC, which had only started losing its grip last week, recorded $191 million in outflows from the fund, surpassing GBTC’s outflow.
May 1st also marked the first time BlackRock’s IBIT recorded a net daily outflow amidst the broader market drawdown that led bitcoin to slip to the lows of $56,500.
Bitcoin Recovery
The market appears to be recovering as bitcoin attracted a modest 3% gain over the past day that pushed its price above $59,300 after FOMC’s dovish stance. As noted by QCP Capital, Chairman Jerome Powell stated that the Fed is not considering rate hikes and announced a reduction in Quantitative Tightening (QT) from $60 billion monthly to $25 billion during the FOMC meeting.
Similarly, in the QRA, the Treasury plans to maintain issuances for longer maturities unchanged, alleviating concerns about a surge in longer-term yields. This approach is expected to dampen the rally of the US dollar, which in turn, bodes well for risk assets such as bitcoin and other cryptocurrencies.
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