Withdrawals from U.S. Bitcoin ETFs spiked over $500 million on May 1 after Fed Chair Jerome Powell announced unchanged interest rates.
The withdrawals from the U.S. spot Bitcoin exchange-traded funds have contributed to the further surge that occurred on Wednesday, May 1, surpassing $500 million.
This significant selling pressure emerged in the wake of the Federal Open Market Committee meeting, during which Fed Chair Jerome Powell indicated that interest rates would remain unchanged.
As a result, the price of Bitcoin dropped by an additional 5%, reaching $57,500. Investors from Farside provided information indicating net outflows of $563.7 million from spot Bitcoin exchange-traded funds on Wednesday.
Fidelity Bitcoin ETF Outflows Beat Grayscale’s
Following the fund’s establishment, the BlackRock Bitcoin ETF IBIT recorded its first outflow of $37 million. On the other hand, Fidelity’s FBTC, which recorded the biggest outflows at $191 million, surpassed Grayscale’s GBTC with $167 million in withdrawals.
Within a single day, each of the nine spot Bitcoin ETF the United States had net outflows for the very first time. Wednesday was the day that Bitcoin ETF experienced one of the most significant price reductions on the underlying assets.
The discounts for some of the most popular Bitcoin exchange-traded funds (ETFs), such as BlackRock’s IBIT, have increased to roughly 1.8%. Other Bitcoin exchange-traded funds also saw reductions in the same range.
James Seyffart, an exchange-traded fund (ETF) analyst at Bloomberg Intelligence, noted that limiting the discounts to a single fund would have been particularly concerning.
“That’s not a great look. It’s a little out of the ordinary in the fact that we’ve seen premiums and discounts in the range of -1% to +1% and this is bigger. But it’s not groundbreaking.”
Teddy Fusaro, the President of Bitwise, commented on the current market volatility, predicting such dislocations during periods of severe market turmoil. He indicated that these incidents are often brief and prevalent, often occurring in the closing minutes of transactions.
MyAccording to Fusaro, early in the trading session on Wednesday, all exchange-traded funds (ETFs) were trading at a level that was relatively near their projected net asset value (NAV).
In addition, he stated that it is reasonable to anticipate that there may be modest premiums or discounts to NAV, depending on the market conditions and the equilibrium of buying and selling activity.
Not only has the price of Bitcoin been breaking down under all support zones recently, but there has also been a significant amount of selling pressure recently.
Furthermore, Bitcoin’s next support zone is at its 200-day exponential moving average, which is around $52,000. On the other hand, according to the opinions of certain market analysts, if the price of Bitcoin is unable to maintain this support, it may continue to fall until it reaches a level below $50,000 and even reaches $42,000.