Bitcoin ETFs Report Second-Highest Monthly Outflow of Over $800 Million
Recent trends indicate a divergence in institutional sentiment towards Bitcoin and U.S. Treasury bonds amid market volatility:
- A social media account suggested "sell bonds, buy bitcoin," reflecting some crypto advocates' views on the fragility of the dollar system.
- U.S.-listed spot Bitcoin ETFs are experiencing significant outflows, with over $800 million exiting this month, following a record $3.56 billion in February and $767 million in March.
- Conversely, strong demand was observed for three-month Treasury bills, with the U.S. Treasury selling $80 billion at an interest rate of 4.225% and six-month bills totaling $68 billion at 4.06%.
- The bid-to-cover ratio for three-month bills rose to 2.96, indicating nearly three times more bids than accepted, showing institutions' preference for U.S. debt as a safe investment.
- The economic outlook remains uncertain, influencing institutions to favor liquid T-bills for flexible, short-term positions.
- Concerns over corporate earnings guidance have increased due to ongoing trade tensions, with BofA’s three-month guidance ratio dropping to 0.4x, the lowest since April 2020.
- Recession odds in the U.S. have surpassed 50%, exacerbated by rising Japanese bond yields impacting risk assets.