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- Bitcoin’s bull cycle may continue if ETF demand stays positive despite recent redemptions.
- Fidelity’s FBTC saw major withdrawals, contributing to a $71.07M Bitcoin ETF redemption on February 19.
- Institutional support remains strong, with Mubadala and Barclays increasing Bitcoin ETF investments.
Ki Young Ju, the CEO of CryptoQuant, stated that BTC’s bull cycle will continue as long as there is a net-positive demand for Bitcoin exchange-traded funds. Ju mentioned, in the X post on X made on Feb. 20, that while inflows into Bitcoin ETF have declined, the outflows have not caught up. He also pointed out that if the demand goes negative for a long time, it might mean that the company is in a bear market.
Significant Bitcoin ETF Outflows
SoSoValue data revealed that on 19 February Bitcoin ETFs reported $71.07 million in net redemptions, the second day in a row of outflows. Fidelity’s FBTC was the most affected, with $48.39 million withdrawn from the fund. Other funds were also outflows such as Valkyrie’s Bitcoin reserve fund, ARK 21Shares’ Bitcoin exchange-traded commodity, VanEck’s bitcoin trackingfund (HODL).
On the other hand, BlackRock’s IBIT and seven other ETFs hardly moved in their prior trading session. Nonetheless, Bitcoin’s ETF trading continued to be active and reached $2.05 billion in volume.
On February 14, a UAE’s sovereign wealth fund, Mubadala Investment Company, is reported to have invested $ 436.9 million in BlackRock’s IBIT. This is a positive indicator and clearly shows that institutional participants in the economy are becoming optimistic about Bitcoin’s long-term prospects.
Uncertainty Around Bitcoin Reserve
On February 13, Barclays in its filing with the US Securities and Exchange Commission revealed that it had bought 2.47 million shares in IBIT. The investment, valued at $131m as of Dec. 31, puts Barclays in the same league as JPMorgan and Goldman Sachs among other financial institutions that have raised their Bitcoin ETFs bets. The price of Bitcoin is around $97,000 as of now, while in the past one month it touched $109,200.
Some of the investors had expected quick action especially after the election but the delay has led to instability in the markets. Lack of certainty in Bitcoin price leads to its decline, hence more pressure can be exerted on Bitcoin price. Although, bitcoin ETF has been overall positive, consistent negative cash flow might affect market status. The next weeks will act as critical in defining if Bitcoin is set to remain on an upward trend or whether it is poised to hit a reverse in trend.
