ETF demand cools down, Bitcoin posts its worst monthly performance since the FTX collapse

Zhitong
2024.05.01 03:33
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Bitcoin experienced its largest monthly decline since the collapse of FTX, mainly due to a cooling demand from investors for a US Bitcoin ETF. Bitcoin fell by nearly 16% in April, with funds flowing into Bitcoin products significantly reduced. In addition, tokens such as Ethereum and Solana also saw significant declines. Stocks related to cryptocurrencies also experienced declines. It is worth noting that 11 US physical Bitcoin ETFs saw a net outflow of $182 million in the month. These funds had a net inflow of $4.6 billion in March. This marks the first monthly outflow for US Bitcoin ETFs

According to the Zhitong Finance and Economics APP, due to a cooling demand from investors for the US Bitcoin ETF, Bitcoin has experienced its largest monthly decline since the collapse of Sam Bankman-Fried's FTX empire. Bitcoin fell by nearly 16% in April, just slightly lower than the decline in November 2022. The frenzy caused by the US ETF pushed Bitcoin to a record high of nearly $74,000 in March, but as expectations for a rate cut by the Federal Reserve weakened, demand for high-risk investments was hit, leading to a significant reduction in funds flowing into Bitcoin products.

Bitcoin records worst monthly performance since FTX collapse

On Tuesday, the price of Bitcoin plummeted by nearly 5% to around $60,000. Tokens such as Ethereum and Solana saw even larger declines. Stocks related to cryptocurrencies also fell, with MicroStrategy (MSTR.US) plunging by 18%, Marathon Digital (MARA.US) down 11%, Riot Platforms (RIOT.US) dropping nearly 9%, and CleanSpark (CLSK.US) falling by almost 10%.

As of April 29, 11 US spot Bitcoin ETFs saw a net outflow of $182 million for the month. These funds had a net inflow of $4.6 billion in March. The US Securities and Exchange Commission (SEC) approved these funds in January this year.

US Bitcoin ETF sees monthly outflow for the first time

Seth Ginns, Managing Partner and Head of Liquid Investment at Coinfund, stated on Tuesday, "ETFs have created a new investment channel that has been widely welcomed, far exceeding anyone's expectations." This "led to a rapid rise in Bitcoin, far beyond expectations."

The highly anticipated quadrennial Bitcoin halving event, which reduces the new Bitcoin supply in the market and historically has driven prices, has had minimal impact since the halving on April 19.

Market observers have been looking for new tailwinds in Asia and closely monitoring Bitcoin and Ethereum spot ETFs listed in Hong Kong, but the ETFs' listing on Tuesday failed to inspire investor confidence. Data compiled by Bloomberg shows that the total trading volume for these 6 new ETFs on their first trading day was $11 million This is far from the $4.6 billion total trading volume when the 10 U.S. spot Bitcoin products first appeared.

K33 Research analysts said, "Before the ETF launch in Hong Kong, the market had built some irrational expectations."

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