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Truth Social withdrew its spot Bitcoin ETF application on May 19 as competition intensified across the U.S. crypto exchange-traded fund market.
The withdrawal arrived during a broader slowdown in ETF demand. Bitcoin price also slipped toward $76,000 after losing nearly 5% over the past week.
Truth Social Withdraws Spot Bitcoin ETFs Filing
Yorkville America, the asset manager behind the proposed Truth Social Bitcoin ETFs, confirmed the withdrawal in a filing with the Securities and Exchange Commission.
The company said it plans to pursue a structure under the Investment Company Act of 1940 instead of the Securities Act of 1933.
Seyffart suggested the withdrawal likely reflected mounting competitive pressure within the spot Bitcoin ETF market.
That pressure increased after Morgan Stanley launched its MSBT Bitcoin ETF earlier this year with a management fee of only 14 basis points.
Bloomberg analyst Eric Balchunas also pointed to pricing pressure across the sector. He suggested smaller issuers may struggle to compete as large firms aggressively cut fees to gain market share.
The spot Bitcoin ETF market has become increasingly concentrated around BlackRock, Fidelity, and a handful of dominant issuers controlling most inflows.
Bitcoin ETF Outflows Surge ~$1 Billion
Outflows from the spot Bitcoin ETFs have surged to nearly $1 billion in the first two days of the week. On Monday, May 18, the net outflows surged to $648 billion, with BlackRock alone contributing $450 billion. The next day, the outflows continued to $331 million across all US ETF issuers, as per data from Farside Investors.
On May 19, BlackRock’s iShares Bitcoin Trust ETF (IBIT) saw $325 million of net outflows. BlackRock’s spot Bitcoin ETF, IBIT, recorded net outflows of 4,238 BTC. Furthermore, the fund also registered its trading volume at $1.1 billion.
Is Bitcoin ETF Outflow A Bullish Sign for BTC Price?
Blockchain analytics firm Santiment reported that Monday’s $648 million in outflows across all US Bitcoin ETF, marked the largest single-day outflow since January 29. The analytics form noted that in the past, such ETF outflows have increasingly acted as a contrarian signal for the crypto market.
As per Santiment, Bitcoin’s strongest rallies historically followed periods of heavy ETF withdrawals and heightened market fear. Besides, the firm added that major ETF inflow spikes often occur when retail traders become overly optimistic and chase momentum.
Santiment noted that currently, the crypto market is witnessing its highest FUD over the past 3.5 months. It suggested that amid this strong prevailing bearish sentiment, bulls can take charge of a BTC price reversal.
