Bitcoin ETFs See $200M Net Outflows Prior to Crucial Fed Inflation Data; Crypto Liquidations Exceed $183M

Highlights:

• US spot Bitcoin ETFs recorded net outflows of $200 million on June 11.
• The outflows are possibly a result of traders derisking ahead of the United States CPI data and the Fed rate decision.
• Bitcoin’s drop to $66K resulted in $183M in crypto liquidations in the last 24 hours.

US-listed spot Bitcoin (BTC) exchange-traded funds (ETFs) experienced their second consecutive day of net outflows ahead of the Fed’s FOMC meeting and the release of key US inflation data on Wednesday. According to data from Farside Investors, spot Bitcoin ETFs witnessed net outflows of $200.4 million on June 11.

Grayscale Bitcoin Trust (GTBC) saw the largest net outflows, totaling $121 million, followed by ARK 21Shares Bitcoin ETF (ARKB), which recorded $56.5 million in net outflows. According to data, the recent outflows have pushed the total net outflows from the GBTC spot Bitcoin ETF past the $18 billion mark.

Fidelity Wise Origin Bitcoin Fund (FBTC), Bitwise Bitcoin ETF (BITB), and VanEck Bitcoin Trust (HODL) witnessed net outflows of $7.4 million, $11.7 million, and $3.8 million, respectively. 

Meanwhile, other funds, such as BlackRock’s iShares Bitcoin Trust (IBIT), recorded no flows on Tuesday. The 11 spot BTC ETFs ended their 19-day streak of net inflows on Monday, with outflows totaling $64.9 million. As of Tuesday, the spot Bitcoin ETFs have received a total of $15.42 billion in inflows since their launch in January.

Market Anticipation Drives Bitcoin ETFs Sell-Off

Markets are now anticipating two key economic indicators from the US later on Wednesday: the Federal Open Market Committee (FOMC) meeting results and the Consumer Price Index (CPI) data. According to a CNBC report, the latest CPI, a key inflation gauge, is anticipated to show a 0.1% rise from April, indicating a broader disinflationary trend.

The Federal Reserve’s rate-setting meeting is anticipated to yield no surprises. CME Group forecasts a 99.4% probability that the Fed will maintain the current interest rate of 5.25% to 5.50%, rather than implementing a rate cut.

Matthew Dixon, CEO of the crypto rating platform Evai, highlighted the importance of the forthcoming CPI release and Federal Reserve meeting. He recognized the tangible risk of elevated inflation, which could boost the dollar but adversely affect risk assets such as Bitcoin. He said, “It’s also possible we see CPI subside and dovish Fed resulting in a boost to risk assets.” 

#DXY should tell us directly where markets are headed when we see the #Dollar reaction to tomorrows #CPI and #FOMC rate setting meeting.
There is now certainty. There is a genuine risk of higher #Inflation which would be +ve $ and -ve risk assets inc #BTC
Its also possible we… pic.twitter.com/mF2VyuXXFk

— Matthew Dixon – CEO Evai (@mdtrade) June 11, 2024

Moreover, research firm The Kobeissi Letter provided insight. It highlighted the divergent expectations surrounding the CPI data. The firm pointed out that while major banks anticipate CPI inflation to reach 3.4%, prediction markets indicate a 17% probability of inflation surpassing 3.4% and a 41% likelihood of it falling below 3.4%.

Tomorrow's CPI inflation data is HUGE:

Just about every large bank is expecting CPI inflation to come in at 3.4%, but the markets tell us a more nuanced story.

Prediction markets currently show that there is a 17% chance of inflation ABOVE 3.4%, according to @Kalshi.

CPI… pic.twitter.com/HWOz43doJW

— The Kobeissi Letter (@KobeissiLetter) June 11, 2024

According to Santiment, experts anticipate a 3.4% year-over-year (YoY) rise in the nation’s inflation from May 2023 to 2024.

🧑‍💼🇺🇸 The May 2024 Consumer Price Index (CPI) report is scheduled to be released tomorrow (June 12th) at 12:30pm UTC (11 hours from now). Current experts expect a 3.4% YoY or 0.3% MoM increase…

🐂 If lower, it's a signal that inflation is slowing, increasing the likelihood of… pic.twitter.com/GDFWguyRbo

— Santiment (@santimentfeed) June 12, 2024

Bitcoin Dives to $66000 on Fed Woes

Bitcoin’s price plummeted on Tuesday, dropping from just over $70,000 to $66,000. According to Coinmarketcap data, Bitcoin is presently trading at $67,471, marking a 6% decrease from last week’s peak of nearly $72,000. Despite experiencing a dip, Bitcoin has maintained a gain of over 11.59% in the past month. 

As per Paradigm co-founder Anand Gomes, the volatile crypto market, influenced by various factors including economic conditions, can undergo significant changes within seconds. He said, “No news is bad news in crypto. The market is like a junkie that constantly needs bullish news to stay up. So when there is none, the path of least resistance is lower.”

Bitcoin’s Drop Leads to $183M in Crypto Liquidations

According to Coinglass data, over $183 million worth of leveraged positions have been liquidated on CEXs over the last 24 hours due to the price drop. More than $141 million in long positions and $41 million in short positions have been liquidated. This widespread liquidation activity has affected 82,857 traders. Most liquidations happened on Binance and OKX, with $71 million and $83 million, respectively.

Bitcoin saw liquidations totaling $44.79 million, with $30.74 million from long positions and $14.05 million from short positions. The second-largest crypto, Ethereum (ETH), also experienced a 0.28% downturn over the past day — now trading at $3,517. ETH recorded liquidations amounting to $36.13 million, comprising $26.58 million from long positions and $9.56 million from short positions.

Learn More

• BTC Plummets 5% In A Week, Ahead of The CPI and FOMC Announcements
• Most Important Cryptos Other Than Bitcoin – Top 15 Bitcoin Alternatives 2024
• This Week in Crypto: Major Events to Watch
• Next Cryptocurrency to Explode in 2024

Disclaimer: Cryptocurrency is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.