US ETFs Record Two Weeks of Net Outflows Amid Gloomy Economic Forecast

By Aaron Feuerstein April 24, 2024 In Bitcoin, ETF, Market Analysis
  • Interest in US Spot Bitcoin ETFs is declining short-term, evidenced by two weeks of net outflows, primarily due to concerns over prolonged high interest rates.
  • Despite an 11% gain in Q1, Nickel Digital Asset Management has tempered expectations for its Diversified Alpha fund, citing unsustainable market conditions.
  • Amidst market volatility, notable Bitcoin transactions by the “Mr. 100” address suggest a bullish long-term outlook, with significant recent accumulations.

Interest in the US Spot Bitcoin ETF seems to wane a little, at least in the short term. Data shows two weeks of net outflows of these products. The main reason for the outflows is likely not a sudden dislike of Bitcoin, but rather concerns about expected higher interest rates.

Related: Tether to Freeze Assets in Bid to Block Venezuelan Attempts to Sidestep Oil Sanctions

CoinShares reports that investors are starting to come to terms with the fact that the US Fed may keep rates higher for longer.

Data from Farside below shows that investors pulled a combined US$244 million (AU$374 million) from the funds, with total outflows for the week ending 19 April at US$204 million (AU$313 million), with Friday being the only day of net inflows of almost US$60 million (AU$92 million).


Record Q1 ‘Not New Normal’

Amid the rocky ETF performance Bloomberg reports Nickel Digital Asset Management has adjusted expectations for its US$80 million (AU$122 million) Diversified Alpha fund, despite an 11% net gain in Q1 driven by high crypto volatility. 

The firm, highlighting unsustainable market conditions, cautioned investors of potential increased risks and larger future drawdowns:

Unfortunately, this is not a new normal, we won’t make 5% every month going forwards. Everything you could want in a quarter pretty much happened at some point during that quarter.

David Fauchier, Diversified Alpha Manager

Are People Bored or Scared?

Despite the inflation worries likely behind much of the current market choppiness, analyst Michaël van de Poppe thinks boredom could be returning to the market. While BTC is still consolidating, he points to Bitcoin below US$60k (AU$92k) as a great opportunity to buy.

Meanwhile, analyst InvestAnswers noted that the ominous ‘Mr.100’ made some interesting transactions. The anonymous address, known for a bit of whale activity, made some minor sales but went on a big buying spree. 

InvestAnswers said this accumulation by whales, defying volatility, is extremely bullish long-term.

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Mr. 100 sold 1,000 Bitcoin at $66,100. But also accumulated: +2,326 BTC last week +7,127 BTC last month.


Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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