Economist Warns ETF Outflows May Put Bearish Pressure on Bitcoin
Economist Peter Schiff warns that Bitcoin (BTC) could suffer from downward price pressure caused by outflows from Bitcoin ETFs. Schiff’s statements following withdrawals from Bitcoin ETFs point to the possibility that this could have a negative impact on Bitcoin’s price performance.
Bitcoin ETF Outflows Raise Concerns
Bitcoin ETFs have seen outflows in recent weeks. As reported by Coingape, data over the last ten days shows cumulative outflows from US Bitcoin ETFs were $230 million. Market participants, especially Bitcoin critic Schiff, began to worry about the possible bearish impact of this trend on the price.
Consistent with the view of economists, on May 1, Bitcoin ETFs witnessed the largest single-day outflow with a withdrawal of $563.7 million. This breakout coincided with a 5% drop in Bitcoin price from $63,000 to below $60,000.
The initial excitement generated by the launch of Bitcoin ETFs, which brought in an overwhelming number of buyers, has now translated into an enormous pool of potential sellers, increasing the risk of further price declines, according to Schiff.
Market Imbalance and Investor Sentiment
The launch of Bitcoin ETFs in January 2024 led to a market characterized by excess demand and limited supply, with many investors interested in purchasing. However, the possibility of selling pressure has increased as more investors have started buying Bitcoin ETFs.
As a result, Schiff states that the current market imbalance could significantly push the Bitcoin price down, as many people own ETFs and there is a lack of interest from new buyers.
Moreover, the change in market dynamics is also well reflected in the exit data. Grayscale’s GBTC ETF, the biggest player in the Bitcoin ETF market, gained $43. Another sales day saw 4 million exits, adding to the negative sentiment.
But other ETFs, such as BlackRock’s IBIT and Fidelity’s Wise Bitcoin ETF, showed positive inflows, indicating different investor sentiment across various ETF products.
Entries into the Bitcoin ETF Market
However, BlackRock’s IBIT ETF has witnessed a resurgence with recent inflows of $14.2 million, unlike Grayscale’s outflows. This trend shows that while some investors are exiting their positions, others are still confident in Bitcoin’s long-term prospects.
Additionally, Fidelity’s Wise Bitcoin ETF (FBTC) saw inflows of $2.7 million, and Bitwise’s BITB ETF attracted $6.8 million; This suggests that investor interest is diversifying across different ETFs.
Additionally, other ETFs such as Ark 21shares (ARKB), WisdomTree’s BTCO, and Franklin Templeton’s EZBC also experienced positive moves. ARKB saw inflows of $4.4 million and BTCO and EZBC recorded $2.2 million and $1.8 million respectively.
Bitcoin Price Performance Amid ETF Exits
With the general negative atmosphere resulting from ETF outflows, a downward trend was observed in the Bitcoin price. On Friday, Bitcoin fell 2.48% below $63,000 to $60,819.35, with a market valuation of $1.20 trillion. Bitcoin’s 24-hour trading volume rose 6.50% to $27.06 billion, indicating strong trading activity.
BTC/USD 24-hour price chart (source: CoinMarketcap)
According to Coinglass data, the recent price drop can be partially attributed to increased crypto liquidations, which reached $145 million. Simultaneously, BTC’s market cap fell by 2.51% to $1,197,748,552,399.
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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