- Bitcoin and Ethereum ETFs saw short-lived inflows, followed by significant outflows.
- U.S. CPI data influenced ETF flows, with cryptocurrencies rebounding despite initial declines.
As a seasoned researcher with years of experience navigating the volatile world of digital assets and traditional finance, I find the recent fluctuations in Bitcoin and Ethereum ETF flows intriguing. The short-lived inflows followed by significant outflows are reminiscent of a roller coaster ride, albeit one with potentially lucrative payoffs.
After several consecutive days of investors withdrawing their funds, there was a temporary reversal on the 9th and 10th of September, as more money began flowing into Bitcoin ETFs.
This uptick, however, was short-lived.
Bitcoin ETF suffers outflow
On September 11th, there was a significant change in the trend, resulting in a total net withdrawal of approximately $43.9 million, as reported by Farside Investors.
This abrupt shift ended a two-day streak of positive inflows, highlighting the volatile nature of BTC ETF investments in the current market environment.
It’s quite unexpected that my crypto investments with BlackRock’s IBIT have remained unchanged since the 26th of August, with no inflows or outflows, that is, until a significant outflow of approximately $9.1 million was recorded on the 9th of September.
Over the past few days, it’s been a rollercoaster for my crypto portfolio, but I’ve noticed some positive movements from two players – Fidelity’s FBTC and Invesco’s BTCO. As of September 11th, these funds have reported inflows of $12.6 million and $2.6 million respectively. It’s a glimmer of hope amidst the market volatility!
Instead, it’s worth noting that Farside Investors reported substantial withdrawals, amounting to $54.0 million, from Ark Invest and 21Shares’ ARKB.
Moreover, it’s worth noting that Grayscale’s GBTC recorded withdrawals amounting to $4.6 million, suggesting persistent volatility and evolving trends within the Bitcoin Exchange Traded Fund (ETF) sector.
Ethereum ETF analysis
Similarly, Ethereum [ETH] ETFs mirrored the recent fluctuations seen in BTC ETFs.
On the 10th of September, there was a temporary increase in investments for Ethereum ETFs, amounting to approximately $11.4 million, according to Farside Investors, following a spell of outgoing funds.
Yet, this upward momentum didn’t last long; on the next day, there was a total withdrawal of approximately $0.5 million.
Interestingly, while many Ethereum-based ETFs didn’t see any investment, Fidelity’s FETH managed a small investment influx of approximately $1.2 million. Conversely, VanEck’s ETHV experienced outflows amounting to $1.7 million.
This difference underscores a surprising trend as BlackRock’s ETFs have remained relatively stable, while Fidelity’s ETFs have demonstrated strength and adaptability.
On the price front, both Bitcoin and Ethereum saw declines on 11th September.
Yet, by the 12th of September, both cryptocurrencies rebounded, with BTC gaining 3.3% and ETH rising by 1.58% within a day, as per CoinMarketCap.
What’s causing this?
It seems that the recent change in Exchange-Traded Fund (ETF) trends and cryptocurrency values could potentially be linked to the latest U.S. Consumer Price Index (CPI) report being made public.
According to CNBC’s report, consumer prices experienced a slight 0.2% rise in August, which reduced the yearly inflation rate to 2.5%. This is the lowest inflation rate since February 2021. In simpler terms, the cost of goods and services for consumers went up by only 0.2%, and overall, the price increase over the past year has been at its slowest pace since last February.
Based on this information, Citibank expects a less aggressive 0.25% reduction in interest rates during the next Federal Open Market Committee (FOMC) meeting.
Although this predicted change is coming up, Citi’s assessment indicates that the fundamental Personal Consumption Expenditures (PCE) inflation, a key element influencing Federal Reserve policy, stays consistent. This implies a cautious, even-handed stance in monetary policy for the short term.
As expected, Rachael Lucas, a crypto analyst of BTCMarkets put it best when said,
The withdrawals observed from Bitcoin and Ethereum ETFs mainly stem from the strength of the U.S. economy, and these actions can be understood as a natural aspect of ETF development.
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2024-09-12 23:04