After a sharp 10% drop in price, Bitcoin, Which temporarily stabilized at less than $50,000 before recovering to around $54,000, exchange-traded funds (ETFs) suffered from heavy flows On Tuesday, the total withdrawals amounted to about $168 million. This is the second consecutive day of large withdrawals, resulting in a total weekly outflow of $405 million.
Each lost about $69 million, with Grayscale’s Bitcoin Trust (GBTC) and ARK Invest’s ARK Invest Fund recording the largest number of withdrawals. Fidelity’s FBTC Fund followed with $58 million in outflows, or six consecutive days of withdrawals for the fund. In contrast, Ethereum exchange-traded funds saw inflows of about $49 million on the same day, indicating a change in investor sentiment.
Broader market turmoil contributes to volatility
The withdrawals coincided with more general market volatility driven by geopolitical concerns and unsatisfactory US economic data, adding to the volatility in crypto markets. Bitcoin ETFs As the total trading volume of both cryptocurrencies amounted to more than $5 billion of the total trading volume of Ethereum ETFs, reflecting the increased trading activity during the market downturn, the total trading volume of both cryptocurrencies reached nearly $6 billion.
Source: SoSo Value
Ethereum Outperforms Bitcoin as Investors Look for Alternatives
Although Bitcoin ETFs have seen significant drawdowns, Ethereum ETFs Bitcoin saw $49 million inflows on the same day, indicating a shift in investor sentiment. This pattern suggests that some investors may be spreading their portfolios across alternative cryptocurrencies like Ethereum, which have proven to be resistant to market volatility.
Bitcoin Price Recovers After Briefly Dipping Below $51,000
According to the latest figures, Ethereum has gained over 6% while Bitcoin has also shown some recovery, trading above $56,000. The significant withdrawals from Bitcoin ETFs, as fund managers sold Bitcoin to meet redemption requests, are likely the reason for the slight drop below $51,000.
The Bitcoin ETF withdrawals coincide with the broader cryptocurrency market’s struggles. Increased volatility due to geopolitical tensions and economic uncertainty has prompted investors to seek safer havens or diversify their investments into other cryptocurrencies like Ethereum. But the rebound in Bitcoin’s price and continued inflows into Ethereum ETFs point to a potential stabilization of the market.
Investors and experts will be closely watching the performance of Bitcoin and Ethereum ETFs as the cryptocurrency sector evolves. An important measure of the overall state and position of the cryptocurrency market is the ability of these funds to attract and retain funds.
Featured image by Pexels, chart by TradingView
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