Bitcoin exchange-traded funds in the United States experienced a significant shift on May 10, 2024, recording net outflows of approximately $84.7 million according to data from Farside Investors. The outflow marked a notable reversal for the spot Bitcoin ETF market, which had been riding a wave of institutional enthusiasm since the products launched in January.
TL;DR
- U.S. spot Bitcoin ETFs recorded ~$84.7M in net outflows on May 10, 2024
- The outflows ended what had been a period of steady accumulation
- BTC price stood at $60,792, down 3.58% in 24 hours
- Trading volumes for crypto investment products fell from $17B monthly average in April to just $8B
- Market participants pointed to upcoming U.S. CPI data as a key driver of uncertainty
ETF Outflows Signal Cautious Sentiment
The $84.7 million in net outflows on May 10 represented a sharp contrast to the flows seen in preceding days. According to weekly fund flow data released on May 13, cryptocurrency investment products had actually attracted $130 million in new inflows during the week ending May 10, effectively ending a five-week sequence of outflows. Bitcoin-focused funds accounted for the bulk of those weekly inflows at $144 million, but the final day of the week told a different story.
The data showed that between May 6 and May 10, institutions invested nearly $116.8 million in spot Bitcoin ETFs, marking significant inflows that were a record since the beginning of May. However, the final trading session saw selling pressure intensify, with traders pulling back ahead of key macroeconomic data.
Liquidations Mount as Bitcoin Dips Below $61,000
The broader crypto market felt the weight of the risk-off sentiment. Bitcoin dropped 3.58% over 24 hours to trade at $60,792, while Ethereum fell 4.16% to $2,909. Over the span of seven days, Bitcoin had declined 3.33% and Ethereum had lost 6.24% of its value.
The sell-off triggered a wave of liquidations across derivatives markets. In the 24-hour period, approximately 48,438 traders were liquidated, with total liquidation values reaching $114.66 million. The Fear and Greed Index sat at 46, firmly in neutral territory and reflecting the uncertain mood across the market.
Macroeconomic Uncertainty Weighs on Markets
A major factor behind the cautious positioning was the impending release of the U.S. Consumer Price Index data. Traders were bracing for the inflation report, which could influence the Federal Reserve’s outlook on interest rates. The crypto market has proven increasingly sensitive to macroeconomic indicators, with Bitcoin often trading in correlation with risk assets like equities.
Trading volumes for cryptocurrency investment products reflected this hesitation, dropping sharply from a monthly average of $17 billion in April to just $8 billion in the current period. The decline underscored how market participants were choosing to sit on the sidelines rather than commit capital amid uncertainty.
Institutional Interest Persists Despite Short-Term Outflows
Despite the day’s outflows, the broader institutional narrative for Bitcoin remained strong. Recent 13F filings unveiled fresh spot Bitcoin ETF positions held by institutional investors. Notably, the State of Wisconsin Investment Board disclosed a $64 million investment in Grayscale’s Bitcoin Trust (GBTC), a move that asset management firm MacroScope described as one of the most pivotal disclosures for Bitcoin to date.
As of mid-May 2024, U.S. Bitcoin ETFs collectively held approximately 830,301 BTC, representing roughly 3.954% of the total Bitcoin supply. Grayscale Bitcoin Trust led the holdings with 296,713.9 BTC, followed by BlackRock’s iShares Bitcoin Trust, which had been rapidly accumulating since its launch.
Regionally, while the United States and several other countries saw net inflows during the week, Canada experienced the largest outflows at $20 million, highlighting the divergent sentiment across global markets.
Why This Matters
The May 10 outflows, while notable, proved to be a temporary setback in what would become a remarkable run for Bitcoin ETFs. That single day of outflows turned out to be the last one for nearly three weeks — beginning May 13, the ETFs embarked on a 19-day consecutive inflow streak that would push Bitcoin toward new highs. The episode illustrates how short-term macroeconomic jitters can create brief windows of selling pressure, even as the underlying institutional adoption trend remains firmly intact. For investors, it was a reminder that crypto ETF flows are increasingly driven by the same macroeconomic factors that move traditional markets.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry risk, and readers should conduct their own research before making investment decisions.