Bitcoin ETFs Experience Sharp Decline amidst Crypto Market Downturn
Summary:
On March 14, Bitcoin exchange-traded funds (ETFs) recorded one of their lowest net inflows at $132 million, marking an 80% drop from the previous day. Despite this, the overall net inflow into the U.S. spot Bitcoin ETF neared the $12 billion mark after 44 trading days. This comes amid a broader downturn in the crypto market, with BTC price falling below $69,000. Market instability, regulatory uncertainties, and macroeconomic influences are said to have caused investors to be more cautious. The recent decline is also linked to the upcoming Federal Open Market Committee meeting, which could reveal future Federal Reserve interest rate plans.
Bitcoin exchange-traded funds (ETFs) marked one of their minimum net inflow dates on March 14, with a value of $132 million. This reflects the lowest point over the last eight trading sessions and shows a staggering 80% plunge compared to the prior day. In fact, this Thursday plunge was the second day in a row to note a drop. Just the day before, there was a surge of $684 million, displaying a 38.3% decline from the preceding day. Correspondingly, Tuesday detailed a historic single-day inflow high of $1.05 billion.
The overall fund inflow into ETFs on March 14 was a tad below $400 million, with Grayscale’s GBTC witnessing a second outflow of $257 million. This outflow effectively reduced the net inflow to $132 million. On the very same day, both the VanEck Bitcoin Trust ETF (HODL) and Fidelity’s FBTC reported inflows of $13.8 million and $13.7 million, respectively. Irrespective of GBTC's substantial outflow, the net inflow remained positive on Thursday.
BlackRock’s IBIT ETF noted the highest inflow share at $345 million, while remaining ETFs witnessed more subdued inflows. The total net inflow into the U.S. spot Bitcoin ETF adheres to a substantial trend, coming close to $12 billion after 44 trading days.
The shift in investor sentiment is nestled within a broader slump in the crypto space as the BTC's value dipped below $69,000. The diminishing ETF inflows aligns with the BTC price fickle trend. After a positive movement on Wednesday, the BTC registered a top record above $73,000, only to backtrack on Thursday. On Thursday, the value dwindled to $69,000 and fell further to around $66,000 on Friday, thanks to multiple liquidations on leveraged positions. CoinGlass data details the liquidation of 193,431 traders within 24 hours, with a total value liquidated of $682.14 million.
Market analysts infer the current market instability, regulatory uncertainties and macroeconomic impacts could have induced caution among investors. This downturn could also be ascribed to the forthcoming Federal Open Market Committee (FOMC) meeting next week. This event may provide clarity concerning the Federal Reserve's prospective interest rate strategy. Additionally, The Bitcoin Man, from X Hall of Flame, predicts China's increased interest in Bitcoin could spur a bull run, potentially seeing $1M by 2028.
Published At
3/15/2024 2:00:26 PM
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