Bitcoin Investment Vehicle Flows Turn Negative for First Time Since 2023

A key metric has turned negative for the first time since late 2023, signaling a decline in investor enthusiasm for bitcoin investment vehicles. According to research and brokerage firm K33, rolling one-year notional flows across bitcoin investment vehicles have fallen below zero, reaching -1,176 BTC as of June 18.

This is significant because it mirrors the behavior seen during the prior bear market, where flows turned negative on Oct. 21, 2022, just before bitcoin found a bottom. However, Lunde notes that there are some differences between the two periods, including the dominance of capital moving into Grayscale's closed-end structure in 2020-21.

The global bitcoin ETPs now hold 1,466,029 BTC, down 127,774 BTC, or 8%, from their peak, which is the largest relative drawdown on record. The pace of outflows has cooled in recent days, but demand remains soft, with average daily volume falling to about $1.99 billion, the third-lowest reading of the past year.