Bitcoin ETF outflows Soar over 700%: Is there a Connection with Bybit Exchange Breach?

There’s been a big spike in net outflows of the U.S. spot Bitcoin ETFs on Feb 24 after the market sentiment grew stale – with a significant chunk of it coming from Fidelity and BlackRock’s funds. 

A SoSoValue data confirms that 12 spot Bitcoin ETFs experienced a net total outflow of $516.41 million on Monday itself, marking a 700% surge from the outflow of its previous day ($62.77 million). Monday stands out as the worst single day for spot Bitcoin ETF outflow ever since Jan 8.  

The biggest hit of the outflow was on Fidelity’s FBTC, with $246.96 million lost on a single day, followed by BlackRock’s IBIT, losing $158.59 million. None of the popular ETFs saw any inflows on Monday, showcasing a strong selling market sentiment. Also, the data for the ARK 21Shares’ ARKB wasn’t available on that day. 

The other ETFs that also saw an outflow include – 

• Grayscale’s GBTC: $59.5 million 

• WisdomTree’s BTCW: $12.5 million 

• Invesco Galaxy’s BTCO: $15.02 million 

• VanEck’s HODL: $7.33 million 

• Bitwise’s BITB: $10.26 million 

• Grayscale’s mini Bitcoin Trust: $6.25 million 

However, the on-day selling sentiment didn’t harm the trading volume of the respective ETFs much. In fact, the trading volumes were high, with $2.9 billion in ETFs traded overall. 

A 360 Degree Hit! Ethereum ETFs were no Exceptions 

Heavy outflow was also visible, with Ethereum losing $78.09 million on Monday, marking a quick shift from the $8.92 million on Sunday. An exit with $48.21 million withdrawn was carried out by BlackRock’s ETHA. The parade went on with Grayscale’s ETHE losing $15.45 million.  

Also, the data for 21Shares’ CETH didn’t get updated at that time. But, there wasn’t much movement for the remaining four  ETH ETFs.  

Is it a Chain Reaction from the Bybit Security Breach? 

Bitcoins seem to have lost direction or have been affected post the Bybit exchange breach, causing $1.4 billion in Ethereum to get stolen from the platform.  

Since there’s been almost no movement from Bitcoin throughout most of February, the ByBit crypto exchange breach could have initiated a chain reaction, causing selling pressure for the spot Bitcoin ETFs. 

The market is in a wait-and-see state while investigators try and find out the reasons behind the negative volatility apart from the speculation relating to the ByBit Exchange breach.