Bitcoin ETP Outflows Spell Bearish Sentiment Among Institutional Investors


Bitcoin ETPs have become more popular than ever since the Securities and Exchange Commission (SEC) approved several Bitcoin ETPs in the last quarter of 2021. They have since done well with hundreds of millions of dollars flowing into these ETPs. They have provided an avenue for institutional investors and others who do not want any direct exposure to the digital asset to trade on. However, the winds seem to be starting to change as the outflows become the daily regime.

Flows Rock Bitcoin ETPs

The market is still reeling from entering a new month but the effects of April continue to slow. Being a historically bearish month for a digital asset, bitcoin has taken some hits in the market, which unsurprisingly translated into ETPs.

Related reading | Institutional Flows of Bitcoin Close to One-Year Highs, Is More Downside Coming?

As a result, outflows rocked the market. The model-committed month of April recorded the highest net monthly net inflows ever recorded in the history of Bitcoin ETPs. In total, there were a total of 14,327 BTC that poured out of the market in this horrific month. This, in turn, caused the total assets under management (AUM) of the digital asset to drop so dramatically that by the end of the month, there were only 187,000 BTC in AUM.

It’s clearly the worst month for ETPs since they’ve become a thing. The bitcoin cryptocurrency in the United States and Canada has not escaped the attack either. In the US markets, a total of 3,312 BTC flowed from ETFs, while their Canadian counterparts saw a worse trend with 7,100 BTC ETPs leaving. This translates to a 10% drop in BTC assets under management in the North American country.

Bitcoin ETPs

Outflows rock BTC ETPs | Source: Arcane Research

It is important to note that all US outflows have been recorded in BITO. Bitcoin exposure to US ETFs also declined significantly in the month of April. It is now 11% lower than it was in the previous month.

In Europe, it was the same trend as its American counterparts. A region that has been struggling with outflows for the better part of the year has seen 3,974 Bitcoin exit the market at the same time. April helped define 10 of the 16 months in which European ETPs were hit by outflows.

Bitcoin price chart from TradingView.com

BTC trading in the mid-$39,000s | Source: BTCUSD on TradingView.com

Brazil was the only country to survive this April. Inflows were recorded but were slight and by comparison, they remain very small when placed in the global context.

Related reading | Dogecoin price could drop to $0.11 due to continuous bearish slide

These outflows recorded in April erased all the gains made by ETPs in March. However, there is good news amid this sea of ​​bad news. Australia is preparing to start trading cryptocurrency ETFs.

It was announced that one of these ETFs will offer direct exposure to Bitcoin. Others will only hold Canadian BTC ETFs, which, in the long run, may prove very profitable for Canadian ETPs.

Featured image from Nikkei Asia, charts from Arcane Research and TradingView.com



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