Bitcoin Falls Below $59K Amid Waning Demand and ETF Outflows

Bitcoin experienced a downturn, falling below $59,000 with a weekly loss exceeding 3.5%, as demand for the cryptocurrency showed signs of weakening. Major exchange-traded funds (ETFs), particularly those like BlackRock’s IBIT, recorded significant net outflows, highlighting a retreat by professional investors from the market.

U.S.-listed Bitcoin ETFs saw $71 million in net outflows on Thursday, marking the third consecutive day of such declines. Fidelity’s FBTC and Grayscale’s GBTC were among the hardest hit, with $31 million and $22 million in outflows, respectively. Notably, BlackRock’s IBIT fund, the largest Bitcoin fund by assets under management, also recorded a rare $13 million outflow, signaling a potential shift in market sentiment.

Despite the decline in demand from institutional investors, U.S. retail interest in Bitcoin appears to be on the rise. This is evidenced by an increased price premium for Bitcoin on Coinbase and a notable uptick in Bitcoin inflows from international exchanges to the U.S. platform, suggesting heightened demand from American retail investors.

Looking ahead, traders anticipate increased market volatility after Labor Day, driven by upcoming economic reports and political events. Although Bitcoin has traded relatively flat over the past week, favorable signals such as potential rate cuts and endorsements from political figures like Donald Trump have kept market sentiment afloat. However, caution remains, with many traders positioning themselves for possible downside risks as they await key economic indicators like the non-farm payroll report.