The recent price action of Bitcoin has not been impressive, and it is having a significant impact on institutional investors. Data shows that institutional investors have a bearish sentiment towards Bitcoin, leading to massive outflows from Bitcoin investment products. These outflows could potentially have a negative impact on the flagship cryptocurrency.
According to CoinShares, Bitcoin investment funds experienced outflows of $284 million last week. Most of these outflows came from the US Spot Bitcoin ETFs, with $156 million leaving the funds. It is reported that last week was the first time these funds saw such significant outflows.
The outflows from the US Spot Bitcoin ETFs are attributed to Bitcoin dropping below $62,000, which is the average purchase price of these ETFs since their launch. This decline in Bitcoin’s price likely triggered automatic sell orders from institutional investors who had mixed feelings towards these funds due to recent price action.
Impact on BlackRock’s iShares Bitcoin Trust
Even BlackRock’s iShares Bitcoin Trust (IBIT) saw outflows for the first time since its launch, with almost $37 million leaving the fund. The magnitude of these outflows is significant and could be a result of panic selling from institutional investors.
Positive Developments
Despite the outflows from Bitcoin investment products, CoinShares noted that the Spot Bitcoin and Ethereum ETFs in Hong Kong recorded $307 million in inflows in their first week of trading. This could be a positive sign for Bitcoin, as it may need a catalyst to continue its upward trend.
Altcoin Performance
While Bitcoin recorded outflows, Ethereum broke its streak of outflows with $30 million flowing into Ethereum investment products. Other altcoins like Avalanche, Cardano, and Polkadot also saw inflows, indicating that institutional investors may be diversifying their portfolios.
There was hope that Grayscale’s GBTC recording net inflows could spark a turnaround in the outflows from Spot Bitcoin ETFs. However, on May 7, these funds still saw a net outflow of $15.7 million. GBTC was the primary culprit, with a net outflow of $28.6 million continuing to negatively impact Bitcoin’s price.
Current Bitcoin Price
As of the time of writing, Bitcoin is trading at around $62,300, down over 2% in the last 24 hours. This decline in price is a result of the ongoing outflows from Bitcoin investment products, which are adding selling pressure to the cryptocurrency.
The recent outflows from Bitcoin investment products driven by institutional investors’ bearish sentiment have had a clear impact on the cryptocurrency’s price. While there have been some positive developments, such as inflows into Ethereum and other altcoins, the overall trend is still bearish. It will be important to monitor how institutional investors continue to behave in the coming weeks and their impact on Bitcoin’s price.
