- Bitcoin ETFs have generated $510 million in net inflows over the past three days.
- Sentiment could be turning a corner, according to 21Shares’ James Butterfill.
- The products have bled roughly $8 billion over the course of eight weeks.
Wall Street’s favorite crypto vehicles have notched net inflows for three consecutive days, reversing a record slump as investors cautiously wade back into Bitcoin. Exchange-traded funds tied to the digital asset have pulled in roughly $510 million since Friday, marking a shift in momentum from the “largest run of outflows we’ve ever seen,” James Butterfill, head of research at asset manager 21Shares, told Decrypt.
“It looks like sentiment might be turning a corner,” he said. “They are the largest inflows we’ve seen since the outflows began in early May, suggesting we’re maybe through the worst of it.” Despite their overwhelming popularity in recent years, Bitcoin ETFs have shed $8 billion over the past eight weeks, with investors seeking shelter as the digital asset plunged to a 21-month low.
On Wednesday, Bitcoin changed hands around $62,000, a 4% increase over the past week, according to CoinGecko. Earlier this month, the digital asset fell as low as $58,000, exacerbating Bitcoin’s tumble from $126,000 in October.
On a proportional basis, Butterfill said the latest streak of outflows represented 8% of assets under management for Bitcoin ETFs, mirroring activity during cycle lows in 2018. For the most part, investors who have allocated to Bitcoin ETFs are underwater, based on an average cost basis around $83,800, according to Glassnode.
So-called whales have sold more than $40 billion worth of Bitcoin since the digital asset’s price peaked last year, Butterfill said. Although Bitcoin’s largest holders have shifted gears, expectations of tighter monetary policy in the U.S. could prevent Bitcoin from breaking out of its current range.
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