As of Tuesday, June 18, 2024, Bitcoin is priced at US$65,210.11, marking a 1% decrease in the past 24 hours.
Spot Bitcoin Exchange Traded Funds (ETFs) in the United States have witnessed a significant withdrawal totaling $580.6 million in response to the Federal Reserve’s aggressive interest rate strategy. On the flip side, investments in Ether-based products have surged, indicating a shift in investor sentiment towards cryptocurrencies.
This trend of withdrawals from Bitcoin ETFs is not limited to the US market. Globally, digital asset investment products have experienced the largest outflows in nearly three months, exceeding $600 million. The consistent inflow trend into spot Bitcoin ETFs seems to have come to a halt, with a total net outflow of $580.6 million last week after five weeks of consecutive fundraising.
Analysts attribute this shift to the outcome of the Federal Open Market Committee (FOMC) meeting, where the Fed maintained interest rates at 5.5% and hinted at a potential rate cut by the end of the year. This cautious approach towards inflation has prompted investors to shy away from riskier assets like Bitcoin, resulting in the aforementioned outflows from ETFs.
Despite a streak of 19 days of inflows amounting to over $4 billion, spot Bitcoin ETFs saw this trend broken last Monday following mixed economic reports in the US, leading to significant withdrawals across various funds. Grayscale Bitcoin Trust (GBTC) saw the largest outflows of $274.3 million, followed by ARK Invest’s ARKB and Fidelity’s FBTC with outflows of $149.7 million and $146.3 million, respectively. However, BlackRock’s IBIT bucked the trend by attracting $41.6 million in new investments.
In contrast to Bitcoin products, Ether products demonstrated resilience and attracted new investments, with a global net inflow of $13 million last week, highlighting strong interest in Ethereum.
The divergence in investment flows between Bitcoin and Ether products may further widen, especially with expectations that the US Securities and Exchange Commission (SEC) could approve spot Ether ETFs by the end of the summer. Experts predict that these new ETFs could capture 10 to 20% of the current flows into Bitcoin ETFs.
It’s important to note that the views expressed in this article are for informational purposes only and do not constitute financial advice. Investing in cryptocurrencies carries a risk of financial loss.
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