ETFs
Bitcoin Spot ETFs Turn Negative as BTC Price Falls
Bitcoin ETF – Coins
Bitcoin Spot ETFs fell into negative territory in early trading on Friday as the price of their underlying asset plunged to its lowest levels since February.
THE BlackRock Bitcoin Trust (IBIT)the largest fund in the category with more than $19 billion in assets, has recently fallen about 6.5%, according to data from etf.com. The second and third largest spot bitcoin ETFs, the Grayscale Bitcoin Trust (GBTC) with $17.5 billion in assets under management and Fidelity Wise Origin Bitcoin Fund (FBTC) with $10.6 billion in assets under management, saw a similar decline.
etf.com: IBIT price one month
Bitcoin Spot ETF Flows Follow BTC Price
GBTC saw more than $34 million in outflows in the two trading days leading up to the July 4 U.S. holiday, while net flows into IBIT and FBTC, as well as the eight other spot Bitcoin ETFs that began trading earlier this year, were tepid, according to research from U.K.-based asset manager Farside Investors.
Learn more: Bitcoin Spot ETF Outflows Surpass $1.1 Billion in 7 Consecutive Days
Bitcoin fell to around $53,600 on July 4, the first time since Feb. 25 that the largest cryptocurrency by market cap fell below $54,000, according to crypto markets data from CoinMarketCap. The asset has recovered some lost ground to most recently trade around $56,750, but is down 23% from its all-time high above $73,000 in March.
“Bitcoin is breaking through important technical and psychological levels at $60,000,” crypto research group 10X wrote in a July 4 note. “This is a key level for bitcoin miners and Bitcoin Spot ETF buyers, and it also broadly marks the bottom (support) of the three-month trading range. The price decline could accelerate as support is broken and sellers scramble for liquidity.”
The drop comes amid continued liquidations by miners and other large bitcoin holders, including Germany and the United States, which recently sent more than $700 million in seized bitcoin to exchanges. Spot Bitcoin ETFs manage about $50 billion in assets, with the total fluctuating based on the price of bitcoin.
In a note to etf.com, Mark Connors, managing director and head of global macro strategy at Dallas-based crypto services firm Onramp, wondered how investors would react to the months-long drop in bitcoin’s price.
Learn more: Pantera Plans to Invest $100 Million in Spot Ether ETF Shares
BTC Price Tailwinds Remain
“While spot ETF flows have slowed and reversed somewhat, this new class [of investors] “Bitcoin has held up for the most part,” Connors wrote. “However, if Bitcoin breaks above $50,000, the determination of the ‘class of 2024’ could be put to the test, as the majority of ‘the over $15 billion in spot BTC ETF inflows have occurred at around $40,000-$60,000 BTC (levels).”
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Still, Connors said an improving regulatory framework for cryptocurrency and favorable statements from likely Republican presidential nominee Donald Trump remain tailwinds supporting his firm’s year-end price target of $110,000 for bitcoin.
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