Spot Bitcoin(BTC) exchange-traded funds (ETFs) witnessed a significant exodus of capital exceeding $200 million on Tuesday, June 11th, reflecting growing investor anxiety surrounding US inflation data. This development underscores the close link between the cryptocurrency market and broader economic factors.
Data from SoSo Values reveals that US-listed spot Bitcoin ETFs experienced a net daily outflow of $200.31 million. Grayscale Bitcoin Trust (GBTC) and ARK 21Shares Bitcoin ETF (ARKB) were the most impacted, with outflows of $121 million and $56 million respectively. Interestingly, BlackRock’s iShares Bitcoin(BTC) Trust (IBIT) did not register any inflows or outflows during this period.
This shift marks a reversal from the positive inflows these ETFs had been enjoying since May 13th. However, the trend changed on June 10th as market participants braced themselves for the release of the US May Consumer Price Index (CPI) data scheduled for Wednesday, June 12th.
Jesse Cohen, a Global Markets Analyst at Investing.com, emphasized the heightened volatility surrounding the upcoming CPI report. A lower-than-anticipated inflation reading could potentially extend the ongoing market rally, as it would fuel hopes of interest rate cuts from the Federal Reserve in the near future.
Adding to the uncertainty is the divergence in expectations for the CPI data. Research firm The Kobeissi Letter pointed out that while major banks predict CPI inflation to be around 3.4%, prediction markets suggest a 17% chance of inflation exceeding 3.4% and a 41% chance of it falling below.
Further complicating the economic outlook are mixed signals like the US adding 272,000 jobs in May with wages rising at an annual rate of 4.1%, while the unemployment rate also climbed to 4%. This paradox of rising employment and wages alongside increasing unemployment adds to the economic ambiguity.
Matthew Dixon, CEO of crypto rating platform Evai, stressed the critical nature of the upcoming CPI data and Federal Reserve meeting. He acknowledged the genuine concern of higher inflation, which would benefit the US dollar but negatively impact riskier assets like Bitcoin(BTC).
Also read: Bitcoin Slump: Is Another Price Surge Hiding Around The Corner?
However, historical data offers some comfort. As pseudonymous crypto researcher Gumshoe noted in a recent analysis, Bitcoin’s price has typically rebounded after FOMC (Federal Open Market Committee) announcements, despite initial volatility.
The outflows from spot Bitcoin ETFs underscore the cautious investor sentiment as the market awaits the much-anticipated inflation data. The outcome of the US CPI report and the subsequent actions of the Federal Reserve will likely dictate the near-term direction of the market.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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