BlackRock’s IBIT led Monday’s outflows with $448 million. It was followed by ARK Invest and 21Shares’ $110 million and Fidelity’s $63 million outflows.
Agne Linge, Advisor to the Board at blockchain financial infrastructure firm Wefi, told Decrypt that the outflows are “correlated to the general market and reflect the de-risking strategy that was conducted by fund managers in light of geopolitical events,” amid the recent escalation in the U.S.-Iran conflict.
While Linge alluded to the impact of the geopolitical situation, Illia Otychenko, lead analyst at CEX.IO, suggested the outflows were “driven by last week’s U.S. inflation data, which significantly shifted market expectations around Federal Reserve policy, with rising expectations of a rate hike this year.”
Otychenko also noted that the broader de-risking sentiment was also driven by “rising concerns that the U.S.-Iran conflict could escalate again, with Donald Trump’s ‘calm before the storm’ post.”
Looking aheadDespite the bearish sentiment, several structural factors could cushion further downside.
While Strategy’s demand may help offset ETF outflows partly or in full, it does not appear to be a sufficient factor on its own to sustain Bitcoin’s price recovery, Otychenko said, citing similar instances in late January and early February when Strategy’s demand exceeded ETF outflows, without significantly impacting Bitcoin’s price.
The more important factor is long-term holder behavior, Otychenko said, suggesting that these cohorts “have continued accumulating BTC consistently for months at a much bigger scale than MSTR, even as a growing portion of their supply moved into unrealized loss.”
