The spot Bitcoin ETF outflows have continued at a strong pace in the market with the BTC price facing huge selling pressure over the past week. It turns out that all of the ten listed US Bitcoin ETFs have seen strong outflows. This shows a weakness in the institutional interest in the market.
Bitcoin ETF Outflows Surge Significantly
Over the past week, BTC ETFs have experienced significant outflows. With 10 ETFs collectively withdrawing 10,428 BTC, valued at approximately $601 million. As stated, all Bitcoin ETFs are currently decreasing their BTC holdings.
On Wednesday, September 4, the spot Bitcoin ETFs registered the sixth consecutive day of outflows at $37.29 million. However, this was significantly less than the $237 million in outflows on Tuesday, following the news of the DOJ probe in Nvidia which created major havoc on Wall Street as well as the broader crypto market.
Yesterday, the Grayscale Bitcoin Trust (GBTC) reported a net outflow of $34.25 million on September 4. This takes GBTC’s total historical net outflows standing at $19.94 billion.
Despite the overall trend, the Bitwise Bitcoin ETF (BITB) saw a notable inflow of $9.46 million in a single day, the highest net inflow among Bitcoin spot ETFs recently.
BTC ETF Custody Concerns On the Rise
The latest reports in the town suggest that the North Korean hackers have been targeting the crypto market. Their eyes are set on Bitcoin ETFs. Thus, crypto ETF issuers need to have better security protocols in place. Taylor Mohanan, the founder and CEO of MyCrypto, which recently joined MetaMask, wrote:
“Going after ETF issuers is certainly different than their recent DeFi/CeFi/CEX targets, but I’m not sure it’s necessarily an escalation. Prior to crypto, these same hackers spent years successfully infiltrating banks around the globe and targeting the SWIFT system directly. They tend to follow the money and, today, ETF issuers have money”.
Fox Business journalist Eleanor Terret flagged major concerns stating that all crypto ETF issuers use the same crypto custodian – Coinbase – for their BTC and ETH holdings.
Terret added that this exposes crypto ETFs to a single point of failure adding that the centralization of crypto custody poses a significant risk to the stability and security of the market.
VanEck’s Head of Digital Assets Research, Matthew Sigel, clarified his company’s positions stating that they use a different custodian. They don’t publicly reveal their address inviting attackers.
