[ETFs hit and capital outflows, Bitcoin sell-off alert]
Bitcoin (BTC) has experienced continuous selling by institutional investors in recent days. This trend is particularly obvious in Bitcoin spot ETFs, which have recorded capital outflows for three consecutive days. In addition, the Depository Trust & Clearing Corporation (DTCC) announced that it will no longer provide collateral value for cryptocurrency-based ETFs. This decision will be effective on April 30, 2024, further affecting cryptocurrencies. Operation of the Fund.
Bitcoin briefly saw increased demand from institutional investors after receiving spot ETF approval in February, with BlackRock's IBIT in particular recording significant capital inflows in the first few weeks. However, starting on April 24, the Bitcoin spot ETF recorded three consecutive days of outflows of $4.218 million, with BlackRock’s IBIT experiencing its first interruption in inflows over the past 71 days.
These changes reflect increasingly bearish market sentiment toward Bitcoin and its related financial products. Bitcoin prices have now fallen back to about $63,000 from an all-time high of $73,805 on March 14.
The DTCC’s decision not to recognize ETFs based on Bitcoin and other cryptocurrencies as collateral could have far-reaching consequences for market liquidity and the viability of investment vehicles. In this case, capital from Bitcoin may flow out to other traditional financial assets with higher collateral values.
Investors need to be more cautious when considering investing in Bitcoin and its related financial products and pay attention to the possible long-term effects of these changes.