Crypto's ETF Hype Slowing Down?

Record ETF Outflows. Amid the crypto price slump, spot BTC ETFs in America had their worst day on record, posting an all-time high $534M in outflows. Can impending institutional adoption stymie the bleeding?

Outflows from the Grayscale Bitcoin Trust (GBTC) amounted to $167M, a number that roughly aligns with declines from previous trading days. Unfortunately, that is where the similarities with historical spot BTC ETF flows stops…

Not even BlackRock’s IBIT or Franklin Templeton’s EZBC – two ETFs that had yet to go negative – were spared from the drawdown, with yesterday becoming the first day on which every spot BTC ETF experienced simultaneous outflows.

Fidelity’s FBTC and Ark Invest’s ARKB both experienced their largest outflow days on record and contributed a whopping $191M to the outflow total.

While depressed sentiment has been reflected in US ETF flows, action overseas is giving bulls some cause for optimism!

Newly launched spot BTC and ETH ETF instruments in Hong Kong raised $292M of capital on their first day of trading, well ahead of schedule compared to Bloomberg analyst estimates for $1B of inflows within the first two years of launch.

Additionally, BNP Paribas, the second-largest European bank with $570B in assets, reported ownership of $42k of BlackRock’s IBIT ETF in recently filed disclosures.

Although the allocation represents only a tiny fraction of the bank's total assets, it marks the first confirmed purchase of BTC by a global systemically important bank (GSIB) and could signal that other major financial institutions are becoming comfortable with the concept of BTC adoption.

BlackRock’s Head of Digital Assets Robert Mitchnick echoed similar sentiment, stating in an interview with CoinDesk that his conversations with interested firms indicate that sovereign wealth funds, pension funds, and endowments may begin trading spot BTC ETF products within the coming months.

Yesterday's BTC ETF outflows were certainly staggering, and while it is evident that future lulls in crypto markets will continue to trigger outflows from these products, the potential for widespread institutional adoption could propel BTC price to surpass even the most euphoric projections!

Cathie Wood is targeting $3.8M BTC should institutions begin heavily investing in the coin, but nonetheless, it remains to be seen whether this anticipated demand can materialize.