Bitcoin prices are currently in a challenging phase, especially after reaching a high of over $126,000 last October, its value has almost halved, and even dropped more than 25% in just a month.
At the time of writing, Bitcoin is currently at $68,367, down 0.01% since it opened early Monday in Asian trading.
The fall is reminiscent of the ‘crypto winter’ episode during the FTX crisis in 2022, raising questions about whether the market is heading for another long decline.
However, despite the gloomy sentiment, ETF fund flow data paints a calmer picture.
Funds such as iShares Bitcoin Trust (IBIT) have indeed recorded billions of dollars in outflows in recent months.
But over the course of a year, the same funds have still shown much larger net inflows.
Overall, the Bitcoin spot ETF category also remains positive from an annual trend perspective.
This suggests that money is indeed leaving, but not on a massive panic scale.
According to Matt Hougan of Bitwise Asset Management, the selling pressure is not coming from long-term ETF investors.
Instead, it is driven more by short-term traders and hedge funds that are quick to pull capital when momentum turns negative.
In other words, this is more of a position adjustment, not a full-blown run from the market.
At a digital finance event hosted by CNBC, Galaxy Digital CEO Mike Novogratz said that the era of excessive speculation may be over and crypto will move as a long-term investment asset with more modest returns.
While gold surged as Bitcoin fell, institutional investors are still holding on to their holdings.
If there was indeed a major panic, ETF outflows would have been much higher. For now, this situation is seen more as a correction phase, not the beginning of a ‘crypto winter’.
