“`html
Almost two years after the launch of Bitcoin ETFs in the U.S., these funds are facing tough times, especially with worries about a possible bear market looming ahead.
A standout example of this struggle is the BlackRock iShares Bitcoin Trust ETF (IBIT), which just had its biggest day of withdrawals since it started, adding even more pressure on Bitcoin’s price.
Profit-Taking And Caution
Recent outflows from BlackRock’s Bitcoin ETF showcase just how big the current sell-off is. Bitcoin has taken a significant hit, dropping below the vital $100,000 mark after a record high in October.
Related Reading
This downward trend highlights the broad decline across many risky assets, while gold has surprisingly held steady. Analysts believe this could mean investors are moving their money from Bitcoin to gold.
“The crypto market hit a bit of a slump in August,” said Thomas Perfumo, a Global Economist at Kraken, during a recent chat with Reuters. He pointed out that much of the excitement for Bitcoin came from borrowed money. He added, “The momentum seemed to peak during the summer, but this drop has been building for months.”
Further analysis shows that long-term holders are cashing out and Bitcoin ETF funds are becoming more cautious, alongside the digital asset treasury (VAR) firms that had previously been buying up Bitcoin earlier this year.
Brian Vieten, a research analyst at Siebert Financial, shared that Bitcoin treasury companies had collectively bought almost $50 billion worth of Bitcoin this past year.
However, many of these firms are now trading at a discount to their asset value, which might hold back new Bitcoin purchases soon.
Bitcoin ETF Inflows Plummet
This trend comes as major investors express doubts about overinflated values in various assets. José Torres, a senior economist at Interactive Brokers, noted that “the current lack of speculative spirits is dragging down Bitcoin.”
Related Reading
Despite managing over $73 billion in assets, IBIT has taken a 19% dive this quarter. Data from SoSoValue reveals that spot Bitcoin ETF funds have seen $2.59 billion in outflows just this month.
Leading the charge is BlackRock’s Bitcoin ETF, suffering $1.78 billion in outflows this November. Following closely, the Fidelity Wise Origin Bitcoin Fund (FBTC) faced around $540 million in outflows.
The shake-up isn’t just about Bitcoin; the Ethereum ETF market also witnessed outflows, totaling about $74.2 million just yesterday, with BlackRock offloading $165.1 million.
On a brighter note, Solana spot ETFs saw net inflows of $30.09 million on Tuesday, largely thanks to Bitwise’s BSOL. This marks an impressive 15-day streak of inflows for Solana.
Featured image from DALL-E, chart from TradingView.com
Source link
“`