GBTC Selling Impacts Bitcoin: Crypto Fund Outflows at $24.7M

CoinShares, a European cryptocurrency investment firm, has released a new report revealing that institutional Bitcoin (BTC) investment products experienced minor outflows over the past week. The report, titled “Digital Asset Fund Flows Weekly,” shows that BTC investment products saw a total of $24.7 million in outflows. This comes after a significant sell-off in the crypto market driven by a spot Bitcoin exchange-traded fund (ETF), which led to institutions withdrawing nearly $21 million from crypto products between January 11 and 19. However, the outflows slowed down towards the end of last week.

The report also highlights a sharp increase in trade volume for ETF products, reaching $11.8 billion in the last week. This accounted for 63% of all Bitcoin volumes on trusted exchanges, indicating that activity in exchange-traded products is currently dominating overall trading. Despite the minor outflows from digital asset investment products, CoinShares notes that new issuers are benefiting at the expense of higher-cost incumbents in the United States. Incumbents saw $2.9 billion in outflows, while new ETFs have attracted a total of $4.13 billion in inflows since their launch.

According to CoinShares’ head of research James Butterfill, investors viewed the recent price weakness in Bitcoin as an opportunity to add to their short-Bitcoin investment products, resulting in $13 million in inflows. Meanwhile, institutional demand for Ether (ETH) also declined, with outflows of $13.6 million observed in the past week.

This data underscores the impact of spot Bitcoin ETFs on the cryptocurrency sector, as the total market capitalization has dropped 3.4% in the last 24 hours to $1.59 trillion. It is clear that institutional investors are adjusting their exposure to Bitcoin and Ether, potentially due to market volatility and the introduction of new ETF products. These trends reflect the evolving landscape of cryptocurrency investments and highlight the importance of monitoring institutional fund flows in the market.