The upcoming FOMC meeting and the release of actual CPI data could significantly impact investor confidence and influence the net flow trend for Bitcoin ETFs.
After a record-breaking streak of net inflows, US spot Bitcoin exchange-traded funds (ETFs) faced a significant change in investor sentiment on Tuesday, with net outflows reaching $200 million, reversing the positive trend seen since May 13, according to SoSoValue.
Photo: SoSoValue
Grayscale’s Bitcoin Investment Trust (GBTC), the world’s largest Bitcoin fund, led the outflows by losing $121 million on Tuesday, indicating investor concerns. Ark Invest’s ARKB also saw substantial net outflows totaling $56 million.
Bitwise Asset Management’s BITB had a smaller outflow of $12 million, while Fidelity and VanEck’s offerings experienced single-digit net outflows. Notably, BlackRock’s IBIT remained unchanged on Tuesday, with zero net flows.
This shift follows a remarkable 19-day run of consecutive net inflows for US spot Bitcoin ETFs, which ended on Monday. Despite the outflows on Tuesday, these funds still hold a cumulative net inflow of $15.42 billion since their inception in January.
Markets Await US Economic Data
Financial markets are eagerly waiting for important economic data from the US. Wednesday is a crucial day, with the Federal Open Market Committee (FOMC) meeting results and the Consumer Price Index (CPI) data set to be released.
The upcoming CPI report, a critical measure of inflation, is expected to show a modest 0.1% increase compared to April. This fits with the overall disinflationary trend currently seen in the economy, according to CNBC.
The FOMC meeting, on the other hand, is expected to be a non-event, with a near-certainty of no change in interest rates. According to CME Group, there’s a 99.4% chance the Fed will maintain the current rate range of 5.25% to 5.50%.
However, a Reuters poll of economists suggests the Fed might implement two rate cuts later this year, with the first potentially coming in September.
Market Sentiment Shifts Impact Bitcoin Prices
Bitcoin price has also shifted investor sentiments. Bitcoin is currently trading at $67,470, a 6.30% drop from its peak of nearly $72,000 last week. This price drop happened at the same time as spot Bitcoin ETFs saw money flowing out, suggesting there might be a potential correlation between investor sentiment and Bitcoin’s market price.
The outcome of the FOMC meeting and the release of actual CPI data could significantly impact investor confidence and influence the net flow trend in these funds. It is still uncertain whether the recent outflow is a temporary occurrence or indicates a more fundamental shift in investor sentiment.
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