- Withdrawals from Bitcoin ETFs last week were the biggest since March.
- Since the beginning of the week withdrawals of around $300M have been recorded.
Potentially a massive outflow of capital from spot Bitcoin exchange-traded funds was set off by the Federal Reserve, and things could get much worse from here. Concerns were voiced by market observers after the Federal Open Market Committee’s announcement that interest rates would remain unchanged between 5.25% and 5.50%.
The current scenario can be compared to August 2022. When Federal Reserve Chair Jerome Powell warned that the US economy will experience “some pain” due to rate rises. Fearful investors dumped risk assets, causing benchmarks to plummet at the time.
Sluggish Scenario
The crypto asset management CoinShares said that investors pared their exposure to the market. Causing $621 million to pour out of spot Bitcoin ETFs last week, in response to the more hawkish-than-expected Federal meeting.
Withdrawals from Bitcoin exchange-traded funds (ETFs) were the biggest since March. When interest rates are low, riskier assets like Bitcoin do well. On Thursday, cryptocurrency prices were highly volatile, with spot exchange-traded funds linked to Bitcoin continuing their withdrawals.
The price of bitcoin has fallen since mid-March, when it reached an all-time high above $74,000. Due to a flurry of activity from new spot exchange-traded funds. Bears in cryptocurrency have taken over, according to the most recent momentum.
Since the beginning of the week, crypto monitoring company Coinglass has seen withdrawals of around $300 million from spot Bitcoin ETFs. As investors reduce their bets on interest rate reduction from the Fed, relatively high bond yields have weighed on cryptocurrency prices and spot bitcoin ETF outflows.
The price of bitcoin has seen a slight uptick lately. At the time of writing, Bitcoin is trading at $66,326, up 1.43% in the last 24 hours as per data from CMC.
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