Bitcoin ETPs have become more popular than ever since the SEC approved a number of bitcoin ETPs in the fourth quarter of 2021. Later on, they did well with hundreds of millions of dollars inflow into these ETPs. They provided a way for institutional investors and others who did not want any direct exposure to the digital asset to trade on it. However, it seems that the wind direction has started to change as outflow has become the order of the day.
Outflow Rock Bitcoin ETP
The market is still struggling to enter a new month but the impact of the month of April is still on. In what has historically been a bearish month for the digital asset, bitcoin had experienced a slight downtrend in the market, which surprisingly translated into ETP.
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As a result, there was panic in the market. The April Stick to Form recorded the highest monthly net outflow ever in the history of the Bitcoin ETP. Altogether, a total of 14,327 BTC were thrown out of the market in this terrible month. This, in turn, resulted in a steep drop in the total assets under management (AUM) of the digital asset such that by the end of the month, there were only 187,000 BTC in AUM.
This is clearly the worst month for ETPs as they have become a thing. Bitcoin ETPs in the US and Canada were also not spared from this attack. In the US markets, a total of 3,312 were exited from BTC ETFs, while their Canadian counterparts saw an even worse trend leaving BTC ETPs with 7,100. This translated to a 10% drop in BTC AUM in the North American country.
Outflows rock BTC ETPs | Source: Arcane Research
It is important to note that all US outflows were recorded in BITO. US ETFs’ exposure to bitcoin also declined significantly in the month of April. It now sits 11% lower than last month.
In Europe, it was the same trend as its American counterparts. In an area that was battling outflows for the better part of a year, 3,974 BTC left the market at the same time. April helped mark 10 of the 16 months that European ETP was shaken by outflows.
BTC trading in the mid-$39,000s | Source: BTCUSD on TradingView.com
Brazil was the only country that survived the bloody month of April. It did record inflows but these were modest and, comparatively, remain fairly low when placed in a global context.
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These outflows recorded in the month of April had successfully wiped out all the gains made by the ETP in the month of March. However, amidst this sea of bad news there is good news. Australia is getting ready to start trading crypto ETFs.
It has been announced that one of these ETFs will offer direct exposure to bitcoin. Others will only hold Canadian BTC ETFs, which can prove to be very profitable for Canadian crypto ETPs in the long run.
Featured image from Nikkei Asia, charts from Arcane Research and TradingView.com