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Bitcoin ETPs Outflows Suggests Institutional Investors Are Getting Cold Feet

Bitcoin ETPs have been experiencing some immense outflows. These have not come as a surprise though given that the price of the digital asset had crumbled last week. It has followed the price of bitcoin falling below $40,000 once again, leading to bearish sentiment among investors. This in turn has put immense selling pressures on other investors who have gained exposure to the market using trading investment vehicles such as ETPs.

Outflows Rock Bitcoin ETPs

Before this month, Bitcoin ETPs had enjoyed a prosperous month of inflows as faith was renewed in the digital asset following its campaign above $40,000. It was the strongest month in the history of these ETPs since October last year with more than 10,000 BTC in inflow recorded. 

However, the month of April would prove to be the complete opposite as outflows so far for the month have been almost as high as inflows for the month of March and the month is not even over yet. This constitutes one of the largest outflows recorded for any month since the inception of Bitcoin ETPs. The last being in July 2021 when outflows had touched 13,849 BTC,

Related Reading | How Bitcoin Futures Premiums Exhibit Signs Of Market Exhaustion

April has been following this trend hard with more than 9,871 BTC and counting so far. Although a reversal of this trend could very well take place in the remaining days of the month. This is the second-largest outflow ever recorded and the direct effect of this has been the increased sell pressure on investors.

ETPs outlfows second-largest in history | Source: Arcane Research

Nevertheless, this is not as bad of a bearish signal as some might be led to believe. A look at the July 2021 outflows shows that it coincided with the peak of the summer sell-offs, which was promptly followed by a recovery in the price of the digital asset. 

If this is the case, then this might mark the sell-offs that have been rocking the market in recent times. A bounce back from a point like this would likely put bitcoin on a path towards $55,000.

BTC On The Charts

For the better part of last week, the price of bitcoin had nested in the $40,000 support. It had eventually lost hold of this point and slid down to the $39,000 level. This would prove to be short-lived, however, as the midweek trading activities had brought the digital asset back up to $42,000.

BTC starts another recovery trend | Source: BTCUSD on TradingView.com

Even though the asset is doing well at this point, it is a long way from $45,000 where bears are mounting some of the strongest resistance ever seen in the market. This key resistance level had been the undoing of bitcoin in the past week.

Related Reading | Halfway To The Halving: What This Means For Bitcoin

The cryptocurrency has now moved to trade above the 50-day moving average, marking a bullish trend for the short term. A translation to a bullish trend for the long-term would see the digital asset bear the key resistance area of $45,000 and traveling all the way to $48,000. Below this point, BTC continues to stand on shaky ground.

Featured image from Medium, charts from Arcane Research and TradingView.com

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Bitcoin Exchange Traded Products Near 1% Of Total BTC Supply

Bitcoin exchange traded products (ETPs) have had a good month in March. BTC assets under management had grown exponentially in this one-month period to touch a new all-time high. This is propelled forward by the inflows that have categorized these ETPs in the last month. This has made March one of the most successful months for bitcoin ETPs as all BTC products have marked positive net flows over this time period. 

Bitcoin AUM At New All-Time High

The total bitcoin AUM had gone up dramatically in March. Looking at the numbers show this movement to be one of the highest growth trends ever recorded in this regard. The previous one was the jump that was recorded back in November of 2021. By February, the total asset under management had been sitting at 190,165 BTC. However, by the end of March, this number had grown as high as 202,437 BTC. This constituted a new record for BTC under management.

Related Reading | Bitcoin Retail Reaches Second-Highest Buying Rate In History. Good Or Bad?

The net inflows for March were a big addition to this. In total, there were 12,727 BTC that flowed into ETPs last month alone. This had helped the digital asset mark its strongest month in terms of ETP inflows since November. Inflows were recorded all across the board and across all regions. 

BTC ETPs hit a record high in March | Source: Arcane Research

An example of this was the Canadian ETFs which recorded one of the sharpest growth in its history last month. They had been able to increase their total AUM by a total of 6,066 BTC in this time period. Additionally, ProShares also recorded positive inflows. For the rolling period of March 20th to March 25th, it had been able to break out of the low momentum that had plagued it in previous months which were attributed to the associated rolling costs.

This had also resonated through Europe. The region which had been recording net outflows for the last three months had seen a switch-up. This reversal had seen substantial amounts of inflows come in during the month of March.

BTC loses footing, causing it to fall to low $44,000 | Source: BTCUSD on TradingView.com

Most of these inflows are being attributed to the bitcoin recovery in recent times. During the rolling week in March, Bitcoin had seen more strength on the backdrop of the LFG’s Bitcoin Reserve Strategy. Not only had this translated to a higher value for the digital asset, but it had also seen inflows into ETPs grow exponentially.

Related Reading | Bitcoin Monthly Outflows Reach Historically High Value

Overall, the month of March has been a good one for BTC ETPs. It is obvious that demands for the digital asset are on the rise. Not only do retail investors want a bigger piece of the pie but legacy markets have been demanding greater exposure to the cryptocurrency according to this recent trend.

Featured image from FXLeaders, chart from TradingView.com