Bitcoin experienced a significant fall yesterday, a decline that did not spare the ETF ecosystem. This notable drop was marked by Bitcoin ETFs recording their largest outflow in a month, breaking an eight-day inflow streak. The outflow was synchronized with a 6% drop in Bitcoin’s value, primarily driven by escalating tensions in the Middle East.
Who Experienced the Largest Withdrawals?
Among the ETFs, Fidelity’s FBTC faced the largest outflow, with $144.67 million exiting the fund. Ark’s ARKB followed closely, suffering withdrawals amounting to $84.35 million. In contrast, BlackRock’s IBIT ETF bucked the trend by gaining $40.84 million, making it the only ETF to record inflows during this period.
Other funds also saw significant losses. Bitwise’s BITB experienced an outflow of $32.7 million, while VanEck witnessed $15.75 million exiting their fund. Grayscale’s GBTC was not spared either, with $5.9 million being withdrawn.
Ethereum Funds Also Struggled
Ethereum funds were not immune to the market turmoil. Fidelity’s Ethereum Fund (FETH) experienced a record outflow of $25 million, marking the highest daily withdrawal among US spot Ethereum ETFs. In total, Ethereum funds saw $48.6 million leave across nine issuers, highlighting a widespread lack of confidence.
Ethereum ETF Flow (US$ million) – 2024-10-01
- TOTAL NET FLOW: -48.6
- ETHA: 0
- FETH: -25
- ETHW: -0.9
- CETH: 1.2
- ETHV: 2.7
- QETH: 0
- EZET: 0
- ETHE: -26.6
- ETH: 0
For more detailed data and disclaimers, visit Farside Investors (@FarsideUK) on October 2, 2024.
Factors Behind the Bitcoin Decline
The recent decline in Bitcoin’s value came on the heels of a 5% dip on October 1. After attempting a short-lived recovery, Bitcoin fell another 5.9%, reaching $60,200. Market pressures led to panic selling among investors, and Bitcoin struggled to maintain support above $65,500.
Two major non-market factors contributed to this sharp decline. Firstly, Federal Reserve Chairman Jerome Powell’s statement that interest rate cuts are not imminent unsettled many investors. Secondly, the escalating conflict between Israel and Iran created a climate of global market unease.
What’s Next for Investors?
The current situation underscores how geopolitical tensions can significantly impact the crypto market. Investors should exercise caution as Bitcoin may test lower support levels, potentially around $53,600. Keeping a close eye on market developments and geopolitical events is crucial for those involved in cryptocurrencies.
In these uncertain times, staying informed and vigilant can make a substantial difference in investment strategies and outcomes. As always, thorough research and a well-considered approach are essential.
