The U.S. spot Bitcoin ETF market experienced a setback on May 29, as investors pulled back amidst uncertainty stemming from conflicting court decisions related to Donald Trump’s trade policy. After enjoying a 10-day streak of inflows, a total of $358.65 million flowed out of the 12 U.S.-listed spot Bitcoin ETFs on that day, marking the first net outflow since mid-May. This reversal followed a period where over $4.2 billion entered these funds in just 10 days.
Among the ETFs that saw outflows, Fidelity’s FBTC led the pack with $166.32 million in redemptions. Grayscale’s GBTC followed with $107.53 million withdrawn, while ARK 21Shares’ ARKB and Bitwise’s BITB experienced outflows of $89.22 million and $70.85 million, respectively. Other funds such as Invesco’s BTCO, VanEck’s HODL, Valkyrie’s BRRR, and Franklin Templeton’s EZBC also saw smaller outflows totaling a combined $49.83 million.
Despite the overall outflow on that day, May still marked a bullish month for Bitcoin ETFs, with net inflows reaching around $5.85 billion, nearly double the amount seen in April. Interestingly, traditional gold-backed ETFs experienced more than $2.8 billion in outflows during the same period, indicating a shift in investor preference towards Bitcoin as a store of value and hedge against inflation.
The uncertainty surrounding U.S. trade policy, particularly in relation to former President Trump’s tariffs, played a significant role in the market dynamics. The back-and-forth in court decisions regarding the tariffs has raised concerns about potential cost increases and a resurgence of inflation, leading to a cautious approach among investors.
In response to these developments, Bitcoin’s price dipped to $105,332 on May 30 before recovering slightly to just above $106,000. Crypto-related stocks like Coinbase and MicroStrategy had mixed performances, while Bitcoin miners also faced declines. Traditional U.S. equities also gave back gains following the court rulings, indicating a broader market shift towards a wait-and-watch approach.
According to Ruslan Lienkha, chief of markets at YouHodler, Bitcoin’s price movement is currently more of a correction than a bearish reversal. He expects Bitcoin to continue tracking major U.S. tech indices in the medium term, driven by macroeconomic factors like interest rates and liquidity. However, Lienkha believes that Bitcoin’s correlation with traditional markets may gradually weaken as it evolves into a more mature asset class with its own unique market drivers.
Overall, the market outlook suggests that Bitcoin may continue trading within a certain range in the near term, potentially setting a strong foundation for a future upward trend towards a new all-time high.