Wintermute: Bitcoin ETF Sees Negative Fund Flows, Market Leans Neutral Ahead of Rate Hike
On September 15, Wintermute OTC Desk released a market update on September 14, stating that last week saw a net outflow of $463 million from BTC ETFs, marking the first weekly net outflow since June. During the same period, BTC dropped by 4.4%, becoming the worst performer among its tracked assets, while altcoins overall rose by 1.0%. Wintermute indicated that, given the negative fund flows for ETFs and the significantly heightened expectations for a Federal Reserve rate hike, the short-term outlook for the crypto market should shift from a bullish to a neutral stance.
In the crypto market, last week saw a cumulative net outflow of $463 million from Bitcoin ETFs, with ARK and Grayscale contributing approximately $371 million, while BlackRock's funds remained roughly flat. The ETH ETF experienced a net inflow of $197 million for the week, primarily driven by a single-day inflow of $216.4 million following the CPI announcement on Friday, with net outflows from Tuesday to Thursday. Wintermute believes that the ETF buying that had driven BTC from $63,000 to $82,000 over the past three weeks has been absent this week, leading to a decline of about $3,500 in BTC.
Wintermute also pointed out that Robinhood Chain's on-chain revenue has significantly cooled recently. The chain's revenue dropped from a peak of $6 million on September 4 to $485,000 by Sunday, a weekly decline of 69%. During the same period, DEX trading volume remained stable at $14 billion, while TVL rose to $930 million. The trading volume on the PONS launchpad decreased by 17%, as the token creation frenzy from early September gradually faded; on the other hand, Uniswap trading volume on Robinhood Chain increased by 28%, mainly driven by fewer, larger tokenized stock trades. The revenue per unit transaction on Robinhood Chain has decreased by 85% over nine days, and the gas subsidies that drove the surge in September trading activity will expire at the end of this month. Wintermute believes that the on-chain revenue corresponding to the relevant tokens has already decreased by 69% before the end of the subsidies, and further pressure is expected.
Regarding the market outlook, Wintermute stated that as BTC ETF fund flows turn negative again, their stance has shifted from bullish to neutral. One of the logics behind the recent rise in the crypto market was that funds flowed out of the overvalued stock market into BTC via ETFs; however, this week the fund flows have reversed, and BTC's decline has even exceeded that of the stock assets that were previously thought to attract fund flows. Therefore, Wintermute believes that this does not mean the previous logic has completely failed, but at least it weakens the rationale for maintaining a bullish position ahead of the Federal Reserve's rate hike. In the absence of ETF buying, BTC is currently in the range of $76,000 to $82,000, with marginal buyers not being evident.
Wintermute identified two key events to watch this week. First, the U.S. Senate will begin procedural voting on the CLARITY Act on Tuesday, which requires 60 votes for support, while the Republican Party currently holds 53 seats; if the procedural vote passes, it could lead to an unexpected market rally, while failure may mean the market has already priced in the related impacts. Second, the Federal Reserve will announce its interest rate decision on Wednesday, with the market expecting a 25 basis point hike to 3.75% to 4.00%, marking the first rate hike in three years. In this regard, Wintermute believes that the rate hike itself has already been priced in by the market, but the hawkish statements from Fed Chair Warsh regarding future policy have not been fully priced in, especially signals about consecutive rate hikes in the first quarter of 2027, which could further weaken the crypto market.
-- Price
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