Spot Bitcoin ETFs on three-day outflow streak, Ether ETFs rebound

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As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market volatility and trends. Today’s events in the crypto space, particularly the outflows from Bitcoin ETFs and the surge in liquidations, remind me of the classic rollercoaster ride – exhilarating at times, but with its fair share of ups and downs.

On October 10th, U.S.-listed Bitcoin exchange-traded funds experienced their third straight day of withdrawals, whereas Ethereum ETFs in the same category saw a slight, encouraging reversal following a day of no activity.

Based on figures from SoSoValue, there was a significant increase in redemptions for Bitcoin ETFs holding the 12th spot, totaling approximately $120.76 million on October 10. This is a substantial rise compared to the outflows of around $40.56 million observed the previous day.

On a single day, the Fidelity Bitcoin ETF experienced a significant withdrawal of funds to the tune of $149.5 million, marking a shift in trend after no net changes the previous day. Other prominent Bitcoin ETFs joined this trend, with ARK and 21Shares’ ARKB recording outflows totaling $30.30 million, and Bitwise’s BITB experiencing a withdrawal of $6.16 million.

Despite the Bitcoin ETF managed by BlackRock’s IBIT, which is the largest in terms of net assets, experiencing a break in its five-day streak of inflows with an outflow of approximately $10.83 million, this seems to indicate a decrease in investor interest for Bitcoin investments overall.

In the world of Exchange-Traded Funds (ETFs), Grayscale, a notable competitor, experienced withdrawals totaling $18.52 million from its GBTC and $21.16 million from its Grayscale Bitcoin Mini Trust. Interestingly, six other Bitcoin ETFs managed to maintain a balanced state, neither causing these outflows nor attracting new investors.

Market fears drive sell-off and liquidations

Bitcoin’s price saw a 3% decline and reached a three-week low of $58,900, which was followed by a slight recovery to $60,602. This drop occurred concurrently with an increase in Bitcoin outflows. The fall came after surprising U.S. inflation figures revived concerns about the Federal Reserve halting interest rate reductions, putting stress on the cryptocurrency market.

This drop in value led to approximately $198.6 million worth of market liquidations, impacting more than 59,000 traders as reported by Coinglass. In this timeframe, Bitcoin’s long positions resulted in losses of around $53.3 million, while Ethereum traders suffered losses totaling about $31.6 million.

As the sell-off progressed, fear grew across the cryptocurrency market. The closely-watched Crypto Fear and Greed Index dropped to 32, marking its lowest level since mid-September and firmly placing the market sentiment in the “fear” zone.

Ethereum ETFs attract modest inflows amid BTC downtrend

Contrarily to Bitcoin, there was a minor yet significant increase in the investment flow for Ethereum ETFs. On October 10th, nine Ethereum ETFs collectively saw inflows totaling $3.06 million, marking a shift from the previous day’s zero net inflows.

BlackRock’s ETHA spearheaded the investments, bringing in a total of $17.85 million. Meanwhile, Grayscale’s Ethereum Mini Trust saw an influx of approximately $3.34 million, which represents its first positive investments since September 27.

On the flip side, these profits were partly balanced out by withdrawals from three Ethereum ETFs – Grayscale’s ETHE, Bitwise’s ETHW, and Fidelity’s FETH, which recorded redemptions worth $10.37 million, $4.23 million, and $3.54 million respectively. Meanwhile, four other Ethereum ETFs stayed the course, neither adding funds nor withdrawing them.

Currently, Ethereum (ETH) is being exchanged for approximately $2,414, showing little directional movement amidst a market heavily influenced by the fluctuation of Bitcoin.

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2024-10-11 10:36