Altcoins
Bitcoin Collapses: Altcoins in Turmoil
12:00 ▪ 3 minute read ▪ by Evans S.
Flagship Bitcoin has suffered a sharp decline, dragging altcoins with it. Massive net outflows from Bitcoin ETFs (exchange-traded funds) have only made the situation worse. So, what exactly is happening in this market?
Bitcoin ETF: A tsunami of outflows
ETFs have suffered a real hemorrhage. In a single day, US Bitcoin ETFs recorded net outflows of $226.21 million.
Fidelity’s FBTC, in particular, saw $106 million exit its coffers, marking one of the worst days since its inception.
These massive outflows are indicative of a shift in sentiment among institutional investors.
Greyscale GBTC and 21Shares’ Ark Invest and ARKB were not spared, with outflows of $62 million and $53 million, respectively.
Bitwise and VanEck funds also saw outflows of around $10 million each.
The only bright spot came from BlackRock’s IBIT fund, which attracted attention $18 million. A small spark in a turbulent sea.
Impact on the price of Bitcoin and the reaction of Altcoins
Bitcoin saw its price drop 1.48% in 24 hours, reaching $66,704. This decline, although modest, has had significant repercussions on the altcoin market. In fact, when the king of cryptocurrencies stumbles, his subjects immediately suffer.
Ethereum and most altcoins collapsed along with Bitcoin. However, one cryptocurrency stood out: Ton.
Despite Bitcoin’s decline, TON attempted to maintain its position. After reaching the record of $7.87, this token is now aiming for a new ambitious target of $8. Chaikin Money Flow, a key indicator, shows significant buying pressure, supporting this potential increase. Furthermore, Ton was even dethroned Ethereum in terms of active addresses.
However, the road to stability remains fraught with obstacles.
A glimmer of hope?
While Bitcoin falters, ether could cope. The US SEC expects to rule on spot ether ETFs during the summer.
This news has sparked optimism among investors, who hope that these funds will attract a sizable share of the investments currently directed towards Bitcoin ETFs.
JPMorgan analysts estimate that these ether spot funds could capture up to 20% of current Bitcoin ETF flows.
However, this prospect is not without challenges. Regulatory uncertainty has led issuers to exclude staking components from these ETFs, making these products less attractive to institutional investors. Gordon Grant, a crypto derivatives trader, even expressed doubts about their immediate success.
The question remains: will Bitcoin be able to reverse the trend, or are altcoins condemned to endure the same waves of volatility? The next few months will be crucial for investors, who will have to navigate with caution. In the meantime, MicroStrategy invests $500 million.
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Evans S.
Fascinated by bitcoin since 2017, Evariste has not stopped researching on the topic. If his main interest is in trading, the sage is desperate to discover all the advanced centers on cryptocurrencies. As an editor, he aspires to consistently provide high-quality work that reflects the state of the industry as a whole.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.