Bitcoin exchange-traded funds (ETFs) have had a depressing few weeks of outflows, but the tide may finally be turning.
On Friday, every single one of the Bitcoin ETFs in the market saw their cash flow turn positive, which is certainly a first for the young investment products.
The turnaround
According to data from Farside Investors, the Grayscale Bitcoin Trust (GBTC) saw more cash come in than was pulled out since it converted into an ETF in January, which prompted the unanimous turnaround.
Every single day, the fund had recorded outflows as investors who had been unable to redeem their shares previously rushed to do so.
In addition, they also switched to more competitive funds that had lower fees. However, GBTC recorded growth of about $63 million last week on Friday.
Put together with the cash that investors plugged into other Bitcoin ETFs, the collective Bitcoin ETF market saw inflows of a total of $378 million in a day.
This is a remarkable turnaround because the investment vehicles had seen their worst day a week prior to that, as they saw outflows of over half a billion dollars.
It had come after there had been waning interest seen in the investment products from investors for weeks.
The Bitcoin ETFs
11 spot Bitcoin ETFs were granted approval by the US Securities and Exchange Commission (SEC) in January after it had received applications for a decade.
Ordinary investors can use the funds to purchase shares tracking the price of bitcoin via brokerage accounts.
The investment products became massively popular right away, as they recorded inflows of billions of dollars.
Due to the explosion in the popularity of ETFs, the price of Bitcoin also rose and data from CoinGecko shows that the pioneer crypto token reached an all-time high of $73,747.
The slowdown
However, last month had seen the initial hype surrounding Bitcoin ETFs slow down. In addition, the Federal Reserve also stated that it was not in a hurry to reduce interest rates.
Moreover, investors were also scared away of ‘risk-on’ assets, such as Bitcoin, due to turbulence in the Middle East.
The price of Bitcoin saw downward pressure because investors were pulling out their funds and it has now dropped below its current as well as previous all-time high price of $69,044.
Friday proved to be a welcome reprieve in what has been happening in the Bitcoin ETF market for a while.
However, it remains to be seen if investor sentiment is able to sustain the optimistic shift that could drive up the price of Bitcoin once more.
Meanwhile, the market has now turned its eyes towards the SEC once more, as the regulatory body has to respond to applications that have been submitted for an Ethereum ETF.
The chances of approval of this investment product are quite low, even though they had risen after the Bitcoin ETF approval.