The U.S. spot Bitcoin exchange-traded fund (ETF) has ended a seven-day streak of inflows, attracting a total of $1.2 billion during that period, as Bitcoin prices fell.
In this outflow, the Fidelity Smart Point Bitcoin Fund (FBTC) was hit hardest, with approximately $104 million exiting, followed by BlackRock's iShares Bitcoin Trust ETF (IBIT), which saw outflows of $34 million.
The backdrop for this outflow is Bitcoin's price dropping below $71,000 on Wednesday, after exceeding $75,000 earlier in the week, plunging investors back into extreme panic.
Altcoin ETFs were similarly affected by negative sentiment, experiencing slight losses. Like the Bitcoin fund, Fidelity's Fidelity Ethereum Fund (FETH) saw outflows of $37 million, followed closely by Grayscale's Ethereum Trust (ETHE), which had outflows of $9 million.
Investor sentiment further deteriorated that day, with the cryptocurrency Fear and Greed Index briefly rising to 26, indicating 'fear', before falling back to 'extreme fear' on Thursday.
Kyle Rodda, a senior financial market analyst at Capital.com, noted that fragile market sentiment is driving recent price fluctuations.
“The current price action indicates that the market has lost momentum and may face prolonged downside risks,” Rodda stated, mentioning the surge in energy prices due to the conflict between Israel and Iran, as well as the re-pricing of interest rate expectations following the Federal Reserve's increased inflation outlook, which has made market sentiment cautious.
Federal Reserve Chairman Jerome Powell stated that inflation remains “slightly above” the Fed's 2% target, emphasizing the economic uncertainty brought about by the situation in the Middle East.