Bitcoin's price fluctuates amid Bitcoin ETF outflow trends

Bitcoin's value is volatile due to shifts in Bitcoin ETF investments, impacting market sentiment and investor decisions.

May 10, 2024 - 12:58
May 14, 2024 - 06:55
Bitcoin's price fluctuates amid Bitcoin ETF outflow trends
Bitcoin's price dipped below $57,000 from about $64,500 last Monday before rebounding in a tumultuous week.

Bitcoin's price dipped below $57,000 from about $64,500 last Monday before rebounding in a tumultuous week. Investor sentiment toward spot bitcoin Exchange-Traded Funds (ETFs) soured, leading to record net outflows on Wednesday. Additionally, the week saw Binance founder and former CEO Changpeng Zhao's sentencing and fintech firm Block's (SQ) announcement of using some profits to purchase more bitcoin.

Bitcoin Exchange-Traded Funds experience unprecedented outflows

Spot bitcoin ETFs witnessed a week marked by investors withdrawing more funds than they deposited, culminating in a record net outflow of $563.7 million on Wednesday. Notably, Blackrock's iShares Bitcoin Trust (IBIT) experienced outflows for the first time since its debut on Jan. 11, with $36.9 million leaving the fund. Fidelity's Wise Origin Bitcoin Fund (FBTC) also saw a single-day record outflow of $191.1 million. These ETFs had been popular among new investors seeking exposure to the spot bitcoin ETF market. In another unexpected turn, the Grayscale Bitcoin Trust (GBTC), the largest bitcoin ETF by assets, recorded its first net inflows on Friday, with $63 million flowing into the fund. Despite the outflows, analysts at Coinbase suggested that investors might not need to be overly concerned, as ETF flows are just one factor influencing bitcoin prices, with global and liquid markets playing a significant role in price discovery.

Ex-CEO of binance sentenced to four-month prison term

Last Tuesday, former Binance CEO Zhao was sentenced to four months in prison in a Seattle court. He had stepped down from his position in November after pleading guilty to violating the U.S. Bank Secrecy Act, resulting in Binance paying around $4.3 billion. This marked one of the largest corporate resolutions involving criminal charges against an executive. Comparisons have been drawn between Zhao's sentence and that of former FTX CEO Bankman-Fried, who received a 25-year sentence for fraudulent use of customer funds. However, Zhao's case didn't involve misuse of customer funds. Additionally, the founders of bitcoin wallet Samourai Wallet were recently arrested for insufficient anti-money laundering standards.

Block plans to allocate 10% of Bitcoin product profits to Bitcoin

Block, the company behind fintech platforms such as Cash App and Square, has announced its intention to allocate 10% of its gross profits from its bitcoin-related business towards purchasing more bitcoin monthly.

In the first quarter, Block's gross profit from bitcoin through Cash App surged by 59% year-over-year to $80 million. Cash App's bitcoin revenue from customer sales for the same period reached $2.73 billion, a 26% increase from the previous year. However, despite these figures, only approximately 3% of the company's resources are currently dedicated to bitcoin-related ventures.

"We were among the earliest public companies to include bitcoin in our balance sheet: we invested $220 million in bitcoin, and that investment has grown by approximately 160% to $573 million by the end of the first quarter," stated Block CEO Jack Dorsey in a letter.

What's Your Reaction?