Crypto Investment Gains Momentum Despite GBTC Outflows and Declining Bitcoin ETF Interest
Summary:
Last week saw a positive shift in cryptocurrency investment, with a net gain of $862 million. However, interest in spot market Bitcoin exchange-traded funds (ETFs) seems to be deteriorating. While Bitcoin topped the inflows chart, persistent withdrawals from Grayscale's Bitcoin Trust (GBTC) continue to put selling pressure on the digital asset's price. ETH witnessed outflows for the fourth consecutive week while other altcoins, like Solana, recorded inflows. Lastly, the rise of Bitcoin ETFs has made Coinbase an appealing target for hackers and government entities.
Last week witnessed a positive shift in digital asset investments into cryptocurrency products, ending in a net gain of $862 million, a significant contrast to the previous week's net loss of $931 million. However, interest in Bitcoin exchange-traded funds, observed on the spot market, appears to be waning, evidenced by a 36% decrease in daily trading volumes, falling to $5.4 billion from a record high of $9.5 billion in early March.
In terms of digital asset movement, Bitcoin (BTC) led the pack with an inflow of $863 million, buoyed by ETF demand. Spot BTC ETFs reported significant inflows of $1.8 billion, in comparison to $965 million in outflows from Grayscale, a platform that is witnessing persistent withdrawals approximately two months since the listing of 11 Bitcoin ETFs in the US market on January 11.
The enduring withdrawal from Grayscale's Bitcoin Trust (GBTC) has exerted substantial selling pressure on the BTC price for successive weeks. Industry insiders had predicted a gradual slowdown and cessation in GBTC outflows, resulting in unparalleled ETF demand. However, the prevailing trends among investors indicate that GBTC-induced withdrawals are far from over, thereby putting GBTC at the forefront of ETF flow in the past few weeks.
The ETF-induced selling pressure has had a tangible impact on Bitcoin's value, which slid by $4,000 in the last day to just above the $66,000 mark. Many market commentators perceive this as a routine adjustment before the Bitcoin halving event slated for April 20.
Crypto market sentiment is currently bearish. The downturn in Bitcoin's price triggered nearly $500 million in liquidations, while the options market saw a surge in put calls, indicating a bearish trader sentiment.
In contrast, Ethereum (ETH) reported its fourth consecutive week of outflows, totaling $19 million in the past week. On the other hand, altcoins saw a net inflow of $18.3 million, with Solana (SOL) leading the pack with inflows amounting to $6.1 million. In terms of regional outflows, the US topped the list with $897 million, while Europe and Canada collectively registered outflows of $49 million.
In related news, the increased popularity of Bitcoin ETFs labels Coinbase as an attractive target for cyber-criminals and government entities, according to the CEO of Trezor.
Published At
4/2/2024 2:38:02 PM
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