Outflows from U.S. spot Bitcoin ETFs surged past $500 million on Wednesday, May 1, intensifying selling pressure. This increase occurred following the FOMC meeting, during which Fed Chair Jerome Powell announced unchanged interest rates, causing Bitcoin’s price to drop an additional 5% to $57,500. Fidelity’s Bitcoin ETF recorded the highest outflows at $191 million, surpassing Grayscale’s $167 million. For the first time, all nine U.S. spot Bitcoin ETFs registered net outflows in a single day. As discounts on top Bitcoin ETFs surged, market analysts warned of potential further declines, with Bitcoin possibly plummeting below $50,000 if current support levels fail.
Fidelity Bitcoin ETF Outflows Beat Grayscale’s
According to data from Farside investors, the net outflows from spot Bitcoin ETFs on Wednesday were $563.7 million. BlackRock Bitcoin ETF IBIT registered its first outflow since inception, amounting to $37 million. On the other hand, Fidelity’s FBTC recorded the highest outflows at $191 million, beating Grayscale’s GBTC at $167 million. For the very first time, all nine spot Bitcoin ETFs in the U.S. registered net outflows in a single day.
On Wednesday, the price of Bitcoin ETFs witnessed one of the largest discounts on the underlying assets. Discounts for some of the top Bitcoin ETFs like BlackRock’s IBIT surged as high as nearly 1.8%. Other Bitcoin ETFs also showed discounts in a similar range.
James Seyffart, an ETF analyst at Bloomberg Intelligence, remarked that it would have been more worrisome if the discounts were confined to a single fund. He added:
“That’s not a great look. It’s a little out of the ordinary in the fact that we’ve seen premiums and discounts in the range of -1% to +1% and this is bigger. But it’s not groundbreaking.”
Market Volatility and ETF Discounts
Bitwise President Teddy Fusaro commented on the recent market volatility, noting that such dislocations are likely during periods of high market turbulence. He mentioned that these occurrences are typically brief and common, often happening in the final moments of trading.
Fusaro highlighted that earlier in Wednesday’s trading session, all ETFs were trading close to their estimated Net Asset Value (NAV). He further stated that slight premiums or discounts to NAV are expected, depending on market conditions and the balance of buying and selling activities.
BTC Price Collapse to $50,000 Likely?
There’s been solid selling pressure recently as the Bitcoin price has been breaking down under all support zones. The next support zone for Bitcoin is currently at its 200-day EMA, somewhere around $52,000. However, if the BTC price fails to hold this support, it could further plummet all the way down under $50,000, and even to $42,000, as per some market analysts.
Bitcoin staying above $42,000 is all that matters.
