- US Bitcoin ETFs saw their first outflow after seven days of inflows, as BTC consolidated near $67.2K, signaling a possible shift.
- Despite outflows, BlackRock’s iShares Bitcoin ETF added 22,480 BTC over seven days, highlighting ongoing institutional interest.
- Bitcoin futures open interest hit $40.5B, with CME holding 30.7%, signaling high market leverage and potential volatility.
The US Bitcoin ETFs witnessed their first outflow after seven days of strong inflows, as Bitcoin (BTC) consolidated near $67.2K. After adding 22,480 BTC ($1.51B) in just one week, BlackRock’s iShares Bitcoin ETF (IBIT) now has a total holding of 392,121 BTC. The current buying spree by institutional investors cooled off as the price of Bitcoin has retreated within 10% from its top.
ETF Outflows Begin After Strong Inflows
On October 22, inflows into US Bitcoin ETFs turned net negative, resulting in a day-long outflow of $79.1 million. The ARK 21Shares Bitcoin ETF, which saw redemptions totaling $134 million, was the primary source of this withdrawal. It received a new inflow of $43 million from BlackRock’s IBIT. This change occurs as the price of Bitcoin remains stable at $65,000, indicating the market’s continuous consolidation.
Institutional Activity and Derivatives Surge
Institutional investors are excited by the SEC’s recent decision to permit Bitcoin ETF options trading in addition to the ETF inflows. The growing acceptance of Bitcoin as a mainstream financial asset is reflected in the approval of NYSE American LLC and CBOE to list options on Bitcoin ETFs. The Fidelity Wise Origin Bitcoin Fund (FBTC), Bitwise Bitcoin ETF (BITB), and Grayscale’s Bitcoin Trust (GBTC) are a few of the ETFs that are authorized for options trading.
Additionally, the markets for Bitcoin derivatives are still booming; on October 21, open interest (OI) in Bitcoin futures hit a record high of $40.5 billion. With 30.7% of the Bitcoin futures OI, the Chicago Mercantile Exchange (CME) is the largest market, followed by Binance (20.4%) and Bybit (15%). This increase in OI indicates that market leverage is increasing, which might cause substantial volatility if prices move significantly.
Can Bitcoin Break Out of Consolidation?
Bitcoin is seeing price consolidation as long as institutional interest is high. Importantly, levels of leverage and open interest suggest possible volatility in the upcoming weeks. Whether Bitcoin can break out of its current range will be determined in large part over the last week of October.
