Investors slice $2 billion out of bitcoin ETFs so far in June
The rate of outflows puts the funds on track to far surpass May’s losses.
Bitcoin ETFs have registered $2.1 billion in outflows so far in June, putting them on track to surpass May’s $2.4 billion exit, according to SoSoValue.
On Thursday morning, bitcoin briefly edged past $63,000 before falling back to the $62,000 range.
“The macroeconomic conditions are not yet right for a reversal of fortunes here. We have seen liquidity sucked out due to IPO-mania, and investors are running into grey-market trades,” Paul Howard, senior director at Wincent, told Sherwood News.
Howard said that there is still room for bitcoin to sell off, “with many pundits looking for entry at $50K.”
“This would represent a 60% drawdown from the highs, which is typically where we see a four-year cycle bounce. I would expect further consolidation over June and into July/August before we rally,” he said.
Adam Haeems, head of asset management at Tesseract Group, told Sherwood that while the $2 billion ETF outflows headline number looks like capitulation, the daily data reads differently.
Haeems said that outflows averaged around $470 million a day over the first three sessions of June, and the pace has moderated materially.
“The pressure has not cleanly stabilized yet, but it is exhausting rather than building,” Haeems said, adding that what stops the bleed is a rate signal rather than a price rally.
Despite ETFs’ woes, BlackRock filed a new amendment for its Bitcoin Premium Income ETF, prompting Bloomberg Intelligence analyst Eric Balchunas to say the fund “is going to launch very soon.”
The ETF holds both bitcoin as well as shares of it own iShares Bitcoin Trust ETF, and will provide “premium income through an actively managed strategy of writing (selling) call options on IBIT shares,” according to the Securities and Exchange Commission filing.
It will trade on the Nasdaq under the ticker BITA and will have a 0.65% fee, much higher than its flagship BlackRock’s iShares Bitcoin Trust, which charges a 0.25% fee.
That’s still “lower than the two biggest ETFs in ‘covered call’ category which are 95bp and 99bp,” Balchunas posted.
Goldman Sachs is also set to launch its Bitcoin Premium Income ETF soon, which will invest “at least 80% of its net assets” in bitcoin ETPs, options on spot bitcoin and ETPs, as well as options on bitcoin ETP Indices, according to the SEC filing.
