Bitcoin
Spot Bitcoin ETFs Turn Negative as BTC Price Drops
Bitcoin ETF – Currencies
Spot bitcoin ETFs fell into negative territory in early trading on Friday, with the price of the underlying asset plunging to its lowest levels since February.
O BlackRock Bitcoin Trust (IBIT)the largest fund in the category with more than $19 billion in assets, recently fell about 6.5%, according to data from etf.com. The second and third largest spot bitcoin ETFs, Grayscale Bitcoin Trust (GBTC) with US$17.5 billion in AUM and Fidelity Wise Origin Bitcoin Fund (FBTC) with $10.6 billion in AUM, fell similarly.
etf.com: One-month IBIT price
Spot Bitcoin ETF Flows Follow BTC Price
GBTC saw more than $34 million in outflows in the two trading days leading up to the July 4 holiday in the U.S., while net flows into IBIT and FBTC, and the eight other spot bitcoin ETFs that began trading earlier this year, were tepid, according to research from U.K.-based asset manager Farside Investors.
Read more: Spot Bitcoin ETF outflows surpass $1.1 billion in 7-day streak
Bitcoin fell to around $53,600 on July 4, the first time since Feb. 25 that the largest cryptocurrency by market cap has fallen below $54,000, according to crypto markets data provided by CoinMarketCap. The asset has recovered some lost ground to change hands most recently at around $56,750, but is down 23% from its all-time high above $73,000 in March.
“Bitcoin is breaking through significant technical and psychological levels at $60,000,” cryptocurrency research group 10X wrote in a July 4 note. “This is a key level for Bitcoin miners and Bitcoin Spot ETF buyers, and also broadly marks the bottom (support) of the three-month trading range. Price declines could accelerate as support is broken and sellers struggle to find liquidity.”
The latest decline comes amid ongoing liquidations by miners and other large bitcoin holders, including Germany and the U.S., which recently sent more than $700 million worth of seized bitcoin to exchanges. Spot bitcoin ETFs manage about $50 billion in assets, with the total fluctuating with the price of bitcoin.
In a note to etf.com, Mark Connors, managing director and head of global macro strategy at Onramp, a Dallas-based cryptocurrency services firm, questioned how investors would react to the months-long decline in bitcoin’s price.
Read more: Pantera Targets $100 Million in Spot Ether ETF Shares
BTC price tailwinds remain
“While spot ETF flows have slowed and reversed somewhat, this new class [of investors] has held steady for the most part,” Connors wrote. “However, if BTC breaks above $50K, the resolve of the ‘class of 2024’ could be tested, as the majority of “the $15B+ in spot BTC ETF inflows have occurred around BTC’s $40K-$60K levels.”
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Still, Connors said an improved regulatory framework for cryptocurrencies and favorable statements from likely Republican presidential nominee Donald Trump remain tailwinds that support his firm’s year-end price target of $110,000 for bitcoin.
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