ETFs
Bitcoin Slips Below $67,000, ETFs See Outflows Ahead of Fed Meeting, Inflation Data
Key takeaways
- Bitcoin price fell below $67,000 on Tuesday morning.
- Tomorrow’s CPI data release and Federal Reserve meeting could further impact Bitcoin price.
- The Bitcoin price decline followed the first day of net outflows from the Bitcoin ETF spot market in 20 days.
- Various crypto-focused stocks, such as Microstrategy, Marathon Digital, and Coinbase, also fell.
The price of bitcoin (BTC) fell below $67,000 on Tuesday after the Bitcoin exchange-traded fund (ETF) spot market on Monday saw its first day of net outflows in nearly three weeks, as Bitcoin investors grow nervous at the approach to inflation data and an influential interest rate decision.
Bitcoin investors, much like investors in other risky assets like stocks, are closely monitoring developments. Consumer price index (CPI) inflation data released Wednesday morning and result of Federal Reserve Policy Meeting this afternoon.
Inflation numbers and remarks from Fed Chairman Jerome Powell will inform market expectations about when the central bank will decide to cut rates and by how much. Higher rates for longer drives up bond yieldsmaking riskier assets like bitcoin less attractive to investors.
Bitcoin ETFs Weaken and Inflow Streak is Broken
On Friday, it looked like a new all-time high for Bitcoin was imminent, as the price approached the $72,000 mark; however, the situation has been rather declining since then. The price of bitcoin fell below $67,000 on Tuesday for the first time this month, down about 7% from Friday’s high.
Spot Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (I BITE), Bitcoin Trust from GrayScale (GBTC) and Fidelity’s Wise Origin Bitcoin fund (FBTC), which closely track the price of the cryptocurrency, were also trading lower on Tuesday.
The most recent drop in Bitcoin price follows the first day of net outflows for the US Bitcoin spot ETF market in 20 days. According to data from Farside Investors, yesterday’s outflows totaled $64.9 million.
Last week, inflows into Bitcoin ETFs were strong, even recording their second strongest day on record since their launch in January, at $886.6 million. However, crypto market analysts underlines that much of the inflows were tied to an arbitrage opportunity for traders between spot ETFs and futures markets, which explains why the price did not spike following these strong inflows. capital.
Bitcoin-related stocks are also feeling the heat
As bitcoin crashed, it took some of the biggest crypto-related stocks with it.
Actions in Microstrategy (MSTR), which held 214,278 bitcoins worth $5.074 billion at the end of the first quarter, fell about 6% in trading Tuesday. Despite this week’s drop, the stock has more than doubled since the start of the year.
Bitcoin miners large and small also suffered losses in intraday trading. Marathon Digital Funds (MARA), and anti-riot platforms (RIOT) saw their shares fall about 6% each. Among the small miners, Hut 8 (HUT) shares fell 8%, CleanSpark (CLSK) the stock was down 7% while Bitdeer (BTDR) shares were down about 5%.
Stocks on crypto trading platforms such as Coinbase Global (PIECE OF MONEY) were 5% lower while Robinhood (HOOD) the stock slipped more than 3%.