The Bitcoin exchange-traded fund (ETF) market has recently experienced significant turbulence, with substantial outflows and regulatory delays impacting investor sentiment.
Significant Outflows in Bitcoin ETFs
Over the past week, U.S.-based spot Bitcoin ETFs have witnessed considerable outflows totaling approximately $1.2 billion. On January 14, these ETFs collectively lost $209.82 million in assets. BlackRock’s iShares Bitcoin Trust (IBIT) bore the brunt, experiencing an outflow of $219.48 million—the second-largest since its inception. This follows a record single-day outflow of $332.6 million earlier in the year.
In contrast, some funds attracted new investments. WisdomTree’s Bitcoin Fund (BTCW) reported a net inflow of $10.24 million, while VanEck’s Bitcoin ETF (HODL) and ARK 21Shares Bitcoin ETF (ARKB) gained $5.46 million and $2.89 million, respectively.
SEC Delays Decision on Bitwise Crypto Index ETF
Amid these market movements, the U.S. Securities and Exchange Commission (SEC) has postponed its decision on Bitwise’s proposal to launch a broad-based crypto index ETF. The new deadline is set for March 3, 2025. The SEC stated that the extension allows for a more comprehensive review of the proposal, which aims to track the performance of the 10 largest cryptocurrencies by market capitalization, including Bitcoin, Ethereum, and Solana.
Osprey Funds Plans Bitcoin Trust Conversion
Despite regulatory delays and market volatility, Osprey Funds has announced plans to convert its Bitcoin Trust (OBTC) into an ETF. Launched in February 2021, OBTC offers investors Bitcoin exposure without the complexities of direct ownership. As of January 14, the fund manages $186.65 million in assets.
Market Outlook
The recent outflows and SEC delays highlight the ongoing challenges and uncertainties in the Bitcoin ETF market. However, investor interest remains robust, with some funds continuing to attract capital. The SEC’s cautious approach suggests that while the market is evolving, regulatory approval processes will continue to be thorough, potentially impacting the timeline for new crypto investment products.