Last week witnessed the largest withdrawals from Bitcoin ETFs since March, signaling a potential massive outflow of capital. The trigger for this concern was the Federal Reserve’s announcement that interest rates would remain unchanged. This scenario is reminiscent of August 2022 when the US economy faced turbulence due to rate increases, causing investors to dump risky assets and leading to a market downturn.
CoinShares, a crypto asset management firm, reported a significant reduction in investor exposure to the market. As a result, $621 million was withdrawn from spot Bitcoin ETFs last week, responding to the Federal meeting’s hawkish tone. This withdrawal trend continued on Thursday, with high volatility in cryptocurrency prices and ongoing outflows from Bitcoin ETFs.
The price of bitcoin has been declining since mid-March, when it reached a record high above $74,000. The introduction of new spot exchange-traded funds contributed to this trend, as bears in the cryptocurrency market gained momentum. Throughout the current week, Coinglass, a crypto monitoring company, observed withdrawals of approximately $300 million from spot Bitcoin ETFs. This reduction in investor bets on a Fed interest rate cut, coupled with relatively high bond yields, has put pressure on cryptocurrency prices and led to further outflows from spot Bitcoin ETFs.
However, there has been a slight increase in the price of bitcoin recently. At the time of writing, Bitcoin is trading at $66,326, reflecting a 1.43% increase in the last 24 hours, according to data from CMC.
Notable news in the crypto sphere today includes ETHSofia’s announcement of a $10,000 hackathon bounty and an impressive lineup of participants.
