As a seasoned researcher with over two decades of experience in financial markets, I’ve seen my fair share of market swings, both bullish and bearish. The recent developments in the Bitcoin and Ether ETF market are intriguing, to say the least.
On October 2nd, U.S.-based Bitcoin exchange-traded funds saw two successive days of withdrawals. This was prompted by a decrease in Bitcoin’s value, which fell below $61,000, due to intensifying conflicts in the Middle East.
Based on figures from SoSoValue, it was observed that these 12 U.S.-based Bitcoin ETFs, traded on the spot market, experienced a total withdrawal of approximately $91.76 million yesterday, following a previous day’s withdrawal of around $242.53 million.
21Shares’ ARKB fund experienced the largest outflow, with approximately $60.26 million leaving the fund, marking its third consecutive day of losses. The GBTC fund from Grayscale came in second, recording an outflow of about $27.31 million, adding to its total withdrawals since inception which now stand at a staggering $20.12 billion.
To note, BlackRock’s IBIT ETF registered its first decrease in investments after nearly a month, with $13.74 million being withdrawn. This is a change from its previous robust growth, but it has still attracted approximately $21.52 billion in investments since its debut. Similarly, Bitwise’s BITB fund experienced substantial withdrawals amounting to $11.51 million.
Contrary to the general trend of outflows observed in the market that day, Fidelity’s FBTC ETF was the exception, registering inflows totaling approximately $21.08 million, helping to partially balance the overall negative flow.
Over the past two days, the combined trading volume for all 12 Bitcoin ETFs has seen a substantial decrease, going from $2.53 billion on September 30th to just $1.66 billion on October 2nd. However, despite this recent dip, these funds have collectively received approximately $18.53 billion in net inflows since their initial launches, suggesting that the long-term institutional appetite for Bitcoin ETFs remains robust.
Eric Balchunas, a Senior ETF Analyst at Bloomberg, has highlighted BlackRock’s IBIT and Fidelity’s FBTC as top-performing ETFs in terms of assets managed, among those launched since 2020. These funds were introduced during the 2022 bear market, demonstrating a growing institutional interest in Bitcoin amidst ongoing market fluctuations.
Bitcoin price under pressure as geopolitical risks mount
The current trend of withdrawals coincides with Bitcoin’s (BTC) price turbulence, as the digital currency plunged to a minimum of $60,100 earlier in October 2nd and later rebounded slightly above $61,300. The escalating disputes between Israel and Iran, particularly Israel’s anticipated reaction to an Iranian attack, have amplified market volatility, contributing to Bitcoin’s downward trend.
Market analysts have expressed concerns about further downside risks.
According to Analyst Ali’s predictions, if Bitcoin doesn’t hold its ground above $60,900, there’s a possibility of a significant drop, potentially reaching as low as $52,000.
If the current trend in Bitcoin’s price movement follows a descending parallel channel, we might see Bitcoin fall to approximately $52,000.
— Ali (@ali_charts) October 2, 2024
Market analyst Crypto Capo issued a cautionary statement, predicting that if Bitcoin attains a certain point, Ethereum might drop to around $1,800 – indicating potential vulnerability in the overall cryptocurrency sector.
Ether ETFs buck the trend with inflows
Despite Bitcoin ETFs facing ongoing challenges, there was a turnaround in investment for U.S. Ether spot ETFs, recording an inflow of $14.45 million on October 2 following two consecutive days of outflows.
Yesterday, BlackRock’s ETHA fund saw significant investment with approximately $18.04 million, making a comeback after no activity previously. Meanwhile, Franklin Templeton’s EZET ETF recorded an initial investment of $1.81 million, marking the first inflow since mid-August.
On the other hand, ETHE from Grayscale witnessed withdrawals amounting to $5.4 million during that specific day. Meanwhile, other Ethereum ETFs did not register any inflows or outflows that day.
Initially, when it was released, Ethereum (ETH) had dropped by 3.8%. Its value was roughly $2,386 at that point in time. The overall cryptocurrency market was under strain due to geopolitical issues and apprehension among investors.
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2024-10-03 10:18