April 2, 2024
Crypto Inflows Recover, ETF Activity Slows
Latest Cryptocurrency News

Digital Assets Inflows Recover, ETF Activity Slows

In a notable shift, digital asset inflows into crypto investment products have turned positive, registering net inflows of $862 million compared to the previous week’s net outflows of $931 million.

Trends in Bitcoin ETFs and Market Impact

Despite the overall positive trend, the popularity of spot Bitcoin exchange-traded funds (ETFs) appears to be waning. The daily trading volume of ETFs has declined to $5.4 billion, marking a 36% decrease from its peak of $9.5 billion observed in the first week of March.

Grayscale Bitcoin holdings. Source: CoinGlass

Bitcoin (BTC) led digital asset flows with $863 million in inflows, primarily driven by ETF demand. Spot BTC ETFs recorded $1.8 billion in inflows, contrasting with $965 million in outflows from the Grayscale Bitcoin Trust (GBTC). Grayscale’s ETF continues to experience significant outflows, even three months after the products’ approval in the United States on Jan. 11.

Continuous outflows from GBTC have exerted notable selling pressure on BTC prices over the past three weeks. Contrary to expectations of slowing outflows from GBTC and subsequent demand for ETFs, the current investor trends suggest that GBTC outflows persist, maintaining its dominance over ETF flows.

The selling pressure from ETFs has visibly affected the BTC price, which dropped by $4,000 over the past 24 hours, trading slightly above $66,000 at the time of writing. Many market analysts attribute this drop to a routine correction preceding the Bitcoin halving event scheduled for April 20.

The BTC price correction led to nearly $500 million in liquidations, while the options market witnessed increased activity, particularly heavy put calls, indicating a bearish trader sentiment.

Altcoin Outflows and Regional Trends

Ether (ETH) experienced its fourth consecutive week of outflows, amounting to $19 million for the week. Meanwhile, the altcoin market as a whole recorded a net inflow of $18.3 million last week, with Solana’s (SOL) token leading the charge with $6.1 million in inflows.

In terms of regional trends, the United States saw the largest outflows in the past week, totaling $897 million. In contrast, Europe and Canada combined experienced $49 million in outflows.

Image by rawpixel.com on Freepik

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