Bitcoin ETFs lose R$ 8.5 billion in a 4-day losing streak

Source: PortaldoBitcoin Original Title: Bitcoin ETFs lose R$ 8.5 billion in a 4-day negative streak Original Link: Investors withdrew capital from spot Bitcoin ETFs in the United States on Thursday (22), marking the fourth consecutive day of outflows, amid rising macroeconomic and geopolitical volatility.

Funds recorded net outflows of US$ 1.62 billion (R$ 8.57 billion) over four trading days, one of the largest and longest periods of net redemptions since the ETFs’ launch in early 2024. The streak, started on January 16, extended until Thursday (22), as the market absorbed a series of significant withdrawals.

The selling pressure began with an outflow of US$ 394.68 million on the 16th. After Monday, redemptions intensified, with US$ 483.38 million on Tuesday and a significant volume of US$ 708.71 million on Wednesday. The streak was confirmed on Thursday, with another US$ 32.11 million in net outflows.

Bitcoin basis trade loses momentum

Institutional appetite is waning, as the return on the Bitcoin basis trade — a strategy that seeks to profit from the difference between the spot price and the futures market — fell below 5%, compared to 17% a year ago.

“When you see sustained outflows across all the most liquid crypto ETPs, it’s usually a sign that hedge funds are reducing exposure to the basis trade,” according to investment experts. When the strategy becomes less profitable, this more agile capital exits quickly.

“Hedge funds are not the only holders of Bitcoin ETFs — it’s suspected they represent between 10% and 20% of the market — but they move fast and can dominate flows in the short term.”

Macro environment shifts to risk aversion mode

This retreat of so-called “fast money” occurs in a macroeconomic environment of risk aversion.

The S&P 500 opened nearly 54 points lower after the weekend, amid a correction from its all-time high. Bitcoin showed similar behavior, unable to sustain the move above US$ 97,000, entering a sharp decline.

Market observers point out that the lack of interest from major players at current levels contributed to the selling pressure. This movement reflects a broader reduction in risk exposure in institutional portfolios.

As Bitcoin increasingly becomes a macroeconomic asset, its recent decline follows a pattern observed in previous periods of macro stress.

Future outlook

Now, market participants await a change in macroeconomic expectations or a return to the basis trade to reverse the trend.

“A stabilization of macro conditions would help, but the most immediate variable is the Fed. Powell’s term ends in May, and who replaces him will be decisive. A more dovish appointment would change interest rate expectations and likely bring back risk appetite.”

Retail optimism returning could make the basis trade attractive again, but the long-term growth of ETFs depends on the so-called “slow money,” coming from financial advisors.

“I remain confident that we will reach new all-time highs later this year. But this crypto bull market will not be like the previous ones. We are in a phase of wear, not a rocket!”