Bitcoin ETFs Experience $288 Million in Outflows as Investors Embrace Safer Assets Amid ‘Risk-off Mode’ Post Labor Day
Following Labor Day, U.S. spot Bitcoin (BTC) ETFs witnessed substantial capital withdrawals, reflecting a prevailing risk-averse sentiment among investors.
The outflows on September 3 amounted to a total of $288 million, signaling a shift towards safer investment avenues.
Reduction in BTC ETF Investment Flows After Labor Day
With the exception of BlackRock, Wisdom Tree, and Grayscale Mini, which reported no activity, the remaining ETF providers experienced negative cash flows.
Fidelity led the pack with outflows of $162.3 million from its Bitcoin trust fund, trailed by Grayscale and Ark 21Shares with $50.4 million and $33.6 million withdrawn, respectively.
Continued Risk-Off Mode Among BTC ETF Investors
The outflows post-Labor Day have reinforced a downward trend observed over the past week, with data from Soso Value showing consecutive days of negative outflows for ETF products.
This sustained trend indicates that investors in BTC ETFs remain risk-averse, as evidenced by a cumulative outflow of $277 million last week.
Despite ongoing outflows, the price of BTC has remained relatively stagnant. The digital asset slipped below the $60,000 mark and continued to weaken amidst prevailing risk-off sentiment across markets, with BTC trading at $56,600 at the time of reporting, marking a 12% decline from its recent peak of $64,000.
A lack of demand from U.S. investors is likely to exert downward pressure on the crypto’s value in the short term.
Notably, the Coinbase Premium Index, an indicator of BTC demand, highlights that BTC’s price typically rises with increased U.S. demand. However, recent data depict diminished demand (indicated by red), contributing to BTC’s bearish momentum since late August.
For a significant reversal, a notable recovery in U.S. investor demand would be required.
Forecasted Performance and Market Outlook
Many analysts, including QCP Capital, anticipate a subdued performance for BTC in September based on historical trends.
Conversely, a crypto trading firm suggests a potential rally for BTC starting in October and extending into Q4, citing past patterns and options market data to support this projection.
“October, however, has the strongest bullish seasonality… This seasonality play could explain the consistent call buying in the vol market (the desk observed another 150x 80k Dec calls lifted in the Asia morning).”