In a remarkable development for the Bitcoin (BTC) market, BlackRock’s Bitcoin ETF, trading as IBIT, has seen a significant change in trading dynamics.
After an impressive streak of 71 consecutive days of influxIBIT saw no entries during Wednesday’s trading session, marking the first time in almost three months.
A turning point for BlackRock’s Bitcoin ETF?
The IBIT emerged as a favorite in the race among Bitcoin ETFs, securing the first place in terms of inflow and trading volume. However, this recent halt in capital flows signals a potential turning point for the fund, even if it is far from reaching the record for consecutive days of flows.
Eric Balchunas, ETF expert at Bloomberg, Underlines the significance of IBIT’s 71-day consecutive collection, highlighting that it is close to a record and highlighting its tremendous performance since its launch.
In comparison, Balchunas points out that even the popular gold ETF, GLD, saw an impressive three-day streak of inflows during its initial launch phase.
Still, the lack of inflows from BlackRock on Wednesday was not exclusive; eight other Bitcoin ETF issuers also reported zero entries.
In particular, Fidelity, a serious competitor in the ETF race and the finalist in inflows since trading began in January, and Cathy Wood’s Ark Invest were the only managers to record inflows during Wednesday’s session, with $5.6 million and $4.2 million, respectively.
On the other hand, Grayscale, one of the largest BTC holders in the world, continued to experience capital outflows, with a staggering $130 million outflow on Wednesday alone.
According to Farside data, Grayscale’s GBTC ETF saw outflows totaling $1.2 billion in April alone. These outflows have put downward pressure on the price of Bitcoin, which is down 4.2% over the past 24 hours, currently trading at $62,990.
Falling demand and negative financing rate
In different developments in the Bitcoin market, bullish traders have shown signs of reducing their positions in the world’s largest cryptocurrency as two important factors that propelled its growth begin to decline.
According to According to Bloomberg, the Bitcoin funding rate, which represents the premium paid by traders to open new long positions in the perpetual futures market, turned negative on April 19 for the first time since October 2023.
This changing funding rate indicates a moderation in demand for Bitcoin following the launch of several spot Bitcoin ETFs in the United States on March 15, when the token hit an all-time high of $73,700.
Bitcoin funding rates hit a three-year high in March, indicating an overheated market. However, by Tuesday they fell below zero.suggesting a decrease in traders’ desire to open long positions.
Julio Moreno, head of research at CryptoQuant, said this trend reduces traders’ willingness to enter new long positions.
Analyst Vetle Lunde of K33 Research noted that the 11-day streak of neutral to below-neutral funding rates is unusual. A wave of leveraged bets quickly followed past cuts in funding rates.
Lunde suggests that the extended duration of the current perpetual discount could indicate further price consolidation in the market.
Additionally, open interest in Chicago-based CME Group’s Bitcoin futures market declined 18% from its all-time high. This decline reflects hesitant interest among American institutions in exposure and hedging linked to cryptocurrencies.
As the cryptocurrency market searches for new catalysts, attention is now turning to Hong Kong, where a new set of spot Bitcoin ETFs is being established. ready to debut. The market is eagerly watching to see if these ETFs can generate even a fraction of the demand their U.S. counterparts enjoy.
Featured image from Shutterstock, chart from TradingView.com
