7.7 Trillion KRW Net Outflow on Base Rate Announcement Day
Largest Daily Volume Since SEC Trading Approval
"Risk Assets Hit as Rate Cut Expectations Fade"
On the 1st (local time), when the U.S. Federal Reserve (Fed) announced the decision to keep the benchmark interest rate unchanged, a record capital outflow occurred in U.S. Bitcoin spot ETFs (exchange-traded funds).
According to Bloomberg and others on the 2nd, a total of $564 million (approximately 770 billion KRW) was net withdrawn from 11 Bitcoin spot ETFs in the U.S. in a single day on the 1st. This is the largest amount since spot ETF trading began following the approval by the U.S. Securities and Exchange Commission (SEC) in January.
Except for the ETF managed by asset management company Hashdex, most of the 11 ETFs recorded net outflows that day. In particular, the ETF managed by global asset management firm Fidelity suffered the largest loss with a net outflow of $191 million. Grayscale ETF, an asset management company that converted the existing Bitcoin fund (GBTC) into an ETF, also saw $167 million withdrawn.
Ark Investment’s ETF and BlackRock’s ETF, the world’s largest asset management company, recorded net outflows of $98 million and $37 million respectively. This is the first time BlackRock’s spot Bitcoin ETF, which has attracted the most funds since its launch, recorded a daily net outflow.
Earlier, net outflows from these Bitcoin ETFs reached $343.5 million in April alone, breaking the previous three-month trend of net inflows. However, as of the 1st, the total net inflow of all Bitcoin spot ETFs still remains around $11 billion.
Due to the record capital outflow on that day, the price of Bitcoin, which had been fluctuating around the $60,000 mark, briefly plunged to the $56,000 range. The report analyzed that amid persistent inflation, the market abandoned expectations of interest rate cuts and began to anticipate long-term rate hikes, which dealt a blow to risky assets such as cryptocurrencies.
The Fed kept the benchmark interest rate unchanged at 5.25?5.50% for the sixth consecutive time on the 1st. Fed Chair Jerome Powell warned of a prolonged high interest rate environment, stating, "Inflation remains at a high level and the recent slowdown has stalled," while also expressing that the likelihood of the next policy rate move being a hike is "unlikely."
Meanwhile, the Bitcoin spot price, which had fallen to the $56,000 range, rebounded and was trading at around $59,358 as of 10:23 a.m. Korean time, up about 3% from the previous day.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
