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Record $563M Outflow from U.S. Bitcoin ETFs Despite Fed’s Powell Rejecting Rate Hike

In a significant development, U.S.-based Bitcoin ETFs experienced a massive outflow of $563 million on Wednesday. It marked a record withdrawal despite Federal Reserve Chairman Jerome Powell’s assurance against a rate hike.

According to data from Farside Investors and CoinGlass, these funds haven’t seen such a significant outflow since they began trading on January 11. Over the past five days, these ETFs have witnessed a continuous decline; with investors pulling out nearly $1.2 billion since April 24.

An informative graph showing the massive $563 million outflow from U.S. Bitcoin ETFs on a single day, despite assurances from Fed's Chairman Jerome Powell of no rate hike.
Source: Coinbackyard

Leading the outflows on Wednesday was Fidelity’s FBTC, which saw withdrawals amounting to $191.1 million. Bullish investors are particularly concerned by this trend. Especially since FBTC and BlackRock’s IBIT had consistently attracted funds in the first quarter. This compensated for the regular outflows from the more expensive Grayscale ETF (GBTC).

Following Powell’s comments ruling out a rate hike, there was a brief rally in Bitcoin, with its value bouncing from $56,620 to $59,430. This reaction is typical as Bitcoin, like other risk assets, is sensitive to expected changes in liquidity conditions. Concurrently, the yield on the 10- and two-year Treasury notes dropped alongside the dollar index.

Despite this temporary surge, Bitcoin’s rebound was short-lived, with its value dropping back to $57,300 at the time of reporting. Adding to the gloom in the crypto market – the debut of Asia’s first spot Bitcoin and Ether ETFs in Hong Kong earlier this week disappointed with low trading volumes.

May 2, 2024 at 9:15am

Updated May 2, 2024 at 9:15am

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