he U.S. spot Bitcoin ETFs experienced heavy net outflows amounting to $79.1 million indicating the first day of outflows after seven straight days of inflows. This suggests that investors are finally being more conservative when the markets change.
Japan has trailed behind in terms of regulatory clarity so far, as officials there are conservative about crypto ETFs, which have potential applications in the country.
Major Outflows from U.S. Bitcoin ETFs
According to data from SoSoValue, the $79.1 million outflows on October 22 came in their entirety from ARK 21Shares' ARKB fund, which witnessed an astonishing $134.74 million leave it in a single day. This becomes its largest one-day outflow since the inception of the ETF and proves highly indicative of the change in investor mood.
By contrast, BlackRock's IBIT fund, net assets largest asset manager, provided inflows of 42.98M dollars on the same day and offset part of ARKB's losses. Other funds of Fidelity, which is FBTC, and VanEck's HODL reported modest inflows of $8.85 million and $3.82 million, respectively.
Despite these outflows, Bitcoin ETFs have seen a net inflow of $21.15 billion since their inception, with interest in these investment products demonstrating tremendous vitality. The total trading volume of 12 Bitcoin ETFs drastically fell to $1.4 billion on October 22 from its previous pace. Bitcoin traded sideways within its range bound by $66,700 and $67,700.
Japan's Stance on Crypto ETFs
In stark contrast to the changing landscape in the U.S., Japan is adopting a cautious route regarding a spot crypto ETF. According to Oki Shiozawa, an investment director with Sumitomo Mitsui Trust Asset Management, Japanese regulators are not ready to give crypto ETFs the green light. Indeed, FSA Japan takes a very conservative stance on this topic and complicates the broader adoption of these kinds of financial products. Shiozawa added, "I can't think of any way to successfully persuade those authorities at the moment."
High tax rates on crypto investments, classed as miscellaneous income and tagged at 55%, further handcuff Japan's regulatory environment. Comparatively, a capital gain from an ETF is taxed at only 20%. Past scandals like the Mt. Gox incident remain part of the investment psyche.
Institutional Trends and Global Comparisons
Whether Japan likes it or not, institutional demand in the US for a Bitcoin ETF continues to rise. The big investors currently hold about 20% of all US-traded spot Bitcoin ETFs. The increase shows that initial skepticism about investments in cryptocurrency could be dissipating as heavyweight financial companies like BlackRock and Fidelity continue to be out in front. Meanwhile, more than $105 billion poured in from European investors into spot crypto ETFs this year alone, driven by lower market returns compared to the US.
While Japan remains way behind the curve regarding the crypto-ETF adoption question, the US market is dynamic and changing. In this respect, serious institutional investments in the United States show a shift to a more general acceptance of financial products related to cryptocurrencies. Indeed, as the Bitcoin ETF market matures globally, Japan's regulatory environment will have to yield.
