- On March 18, Grayscale Fund outflows of $643 million;
- Bitcoin’s rally has cooled since last week’s record $73,798.
Bitcoin extended its correction as investors digested record one-day outflows from the world’s largest exchange-traded fund and weakening expectations of a Fed rate cut.
As of 1 p.m. on Tuesday, Bitcoin, Singapore’s largest digital asset, was down about 3% to $65,380. Other major tokens, such as Ethereum, Solana, and the most popular Dogecoin, also posted losses.
The $25 billion Grayscale Bitcoin Trust (GBTC) posted an outflow of $643 million on Monday, the largest outflow since converting to an ETF on Jan. 11, the data showed. Earlier, strong demand for 9 new spot Bitcoin ETFs going live at the same time was more than enough to compensate for the massive GBTC exits.
But it went to Fidelity Investments and BlackRock Inc. Funds from other giant products are also cooling, with an overall net outflow of $154 million from these 10 ETFs on March 18.
Singapore-based crypto trading firm QCP Capital wrote in a note on Tuesday that it will “closely track today’s total ETF flow data,” adding that “a net negative would be a clear bearish signal.”
Since the start of trading, ETFs have attracted a total of $12 billion in net funding. Last week, investor interest pushed Bitcoin to an all-time high of $73,798. Since then, the initial pulse of demand for the product has weakened due to warnings about the existence of bubble-like characteristics in some assets, and the position of the crypto leader has begun to waver.
The risks posed by monetary policy are one of the uncertainties. Persistent inflationary pressures are dampening expectations of Fed easing, and Japan has just concluded its most aggressive monetary stimulus program in modern history, scrapping the world’s last negative interest rate.
GBTC’s management company, Grayscale Investments LLC, intends to launch a clone of the fund to compete with competitors who offer cheaper products. A person familiar with the matter earlier told Bloomberg that the cost is expected to be lower than GBTC.