US spot Bitcoin ETFs saw $581 million in weekly outflows amid 'more hawkish-than-expected' FOMC meeting: CoinShares

U.S. spot Bitcoin BTC -1.25% exchange-traded funds witnessed a combined $580.6 million in net outflows last week for the first time in five weeks.

Grayscale’s converted GBTC ETF led the outflows with $274.3 million exiting the higher-fee fund, followed by Ark Invest’s ARKB and Fidelity’s FBTC, which registered $149.7 million and $146.3 million in net outflows, respectively.

BlackRock’s IBIT was the only fund to generate net inflows last week, attracting $41.6 million, while the remaining U.S. spot Bitcoin ETFs witnessed net outflows of zero flows for the week. Total net inflows into the ETFs since trading began in January now stand at $15.1 billion.

The spot Bitcoin ETFs had been on a record 19-day positive streak prior to last week, bringing in over $4 billion in net inflows. The run came to an end last Monday with $64.9 million in net outflows following a drop in bitcoin’s price after U.S. non-farm payroll data and unemployment data gave conflicting outlooks on the U.S. economy , causing uncertainty that led investors to move out from more risky assets, according to crypto trading firm QCP Capital.

The ETFs experienced another $200.4 million worth of net outflows on Tuesday ahead of the FOMC meeting on Wednesday, which saw the only day of net inflows last week, bringing in $100.8 million. However, after the Federal Reserve held interest rates at 5.5% and indicated just one rate cut was coming in 2024 amid persistent inflationary pressures, spot Bitcoin ETF net outflows of $226.2 million and $189.9 million followed on Thursday and Friday.

A more hawkish-than-expected FOMC meeting

Globally, digital asset investment products registered $600 million in net outflows last week — the largest since March 22, according to CoinShares’ latest report.

“The outflows were entirely focussed on bitcoin, seeing $621 million outflows, the bearishness also prompted $1.8 million inflows into short-bitcoin,” CoinShares Head of Research James Butterfill said .

Butterfill argued this was likely due to “a more hawkish-than-expected FOMC meeting, prompting investors to scale back their exposure to fixed-supply assets.”

The net outflows, combined with a 5% drop in the price of bitcoin amid a broader crypto market sell-off last week, saw global assets under management fall from $100 billion to $94 billion, Butterfill added.

Weekly crypto asset flows. Images: CoinShares .

Global digital asset investment product trading volumes also remained lower last week at $11 billion compared to the weekly average of $22 billion this year, according to CoinShares. The U.S. spot Bitcoin ETFs generated $8.73 billion in trading volume for the week but remain significantly down from a peak of $32.69 billion for the week of March 4-8.

Cumulative spot Bitcoin ETF trading volumes are now approaching $300 billion, according to The Block’s data dashboard .

Ether products buck the trend

Meanwhile, ether-based investment products bucked the trend, witnessing $13 million in net inflows last week globally. 

Ethereum ETH -1.58% spot ETFs could capture between 10-20% of the flows currently directed towards Bitcoin ETFs, once live, according to Bitfinex, citing historical similarities in the launch of gold and then silver ETFs.

The U.S. Securities and Exchange Commission approved 19b-4 forms for eight spot Ethereum ETFs from firms like BlackRock and Fidelity on May 23. However, the issuers still need to have their S-1 registration statements go effective before trading can begin, a process that could take weeks.

Last week, SEC Chair Gary Gensler estimated that the S-1 approvals for spot Ethereum ETFs could occur sometime by the end of this summer.

Bloomberg ETF analysts Eric Balchunas and James Seyffart moved up their spot Ethereum ETFs launch data estimate to July 2 on Thursday. “Hearing the [SEC] staff sent issuers comments on S-1s today, and they're pretty light, nothing major, asking for them back in a week. Decent chance they work to declare them effective the next week and get it off their plate before the holiday weekend. Anything is possible but this is our best guess as of now,” Balchunas said .