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The months-long torrent of cash flowing into new Bitcoin exchange-traded funds (ETFs) has finally stalled. Investors pulled nearly $218 million out of the products yesterday, according to data from London-based investment firm Farside Investors.
The substantial cash out comes after a key federal economic report indicated that the American economy grew slower than expected in the first quarter. The metrics likely mean that the Federal Reserve won’t slash interest rates anytime soon, after raising them to a 23-year high to battle inflation.
If interest rates remain high, investors typically steer clear of “risk-on” assets like Bitcoin.
Back in January, the Securities and Exchange Commission approved 11 Bitcoin ETFs. The funds provide investors exposure to the cryptocurrency by buying shares that track Bitcoin’s price via brokerage accounts.
They have been wildly popular, with record amounts of money hitting the products in the weeks following their launch. BlackRock’s iShares Bitcoin Trust (IBIT) has been a particular favorite.
But yesterday, after a 71-day run of inflows, no money entered IBIT. And Grayscale’s ETF lost $139.3 million, while Fidelity’s fund (FBTC) lost $23 million—the first outflow from the product since its launch.
The price of Bitcoin is now $63,562, a 1.1% seven-day drop. Last month, the biggest coin touched a new high of nearly $74,000 per coin, but in April has traded well below its 2021 highs of $69,000.
Edited by Ryan Ozawa.
