- Bitcoin spot ETFs fell from a record-breaking $422.5 million to $53.3 million in 24 hours
- The drop can be attributed to investor mindset as well as broader macroeconomic factors
- With a nine-day winning streak, there’s still a lot of hope for Bitcoin ETFs
The US-listed Bitcoin exchange-traded funds (ETFs) have garnered the attention of investors worldwide owing to their tremendous price fluctuations over a single week. On Tuesday, investors and traders celebrated as BTC ETFs touched a six-week-high inflow of $422.5 million, demonstrating a resilient rise from record lows at the start of the month.
However, on July 17 (Wednesday), the BTC ETF inflow experienced a sharp decline, plummeting from its recent highs to a meager $53.3 million. This marked an 87% decline in ETF inflow within 24 hours, sparking intense controversies within the global cryptocurrency community.
The sharp spike in BTC ETFs on Tuesday sent massive shockwaves through the market, especially since the inflow had been on the lower end during the beginning of the month. The spike can be attributed to factors such as a sense of optimism and resilience among the bulls to push through in the face of significant resistance. As a result, the inflow was among the highest recorded in a daily timeframe.
However, this massive surge in inflow may have triggered a correction within the market, initiating a series of responses from traders. These factors may have contributed to a price pullback, further highlighting the severely volatile nature of cryptocurrency.
Some market analysts have pointed out that the substantial inflows on July 16 likely included a mix of long-term positions and short-term speculative trades. The subsequent decline on July 17 could be a result of short-term traders exiting their positions after the initial surge, leading to a reduction in inflows.
Certain other factors may have also triggered the drop. On Wednesday, the US Securities and Exchanges Commission (SEC) approved spot Ethereum ETF applications by Grayscale and ProShares, allowing them to enlist these ETFs on New York State Exchange (NYSE) by July 23. With a new ETF on the horizon, traders may have sold their existing BTC assets to invest in ETH ETFs and diversify their portfolios.
The upcoming US presidential elections can also be attributed to the recent heightened volatility within the cryptocurrency market. As presidential power is set to change, investors and traders are raising concerns about the future of the crypto regulatory landscape. As a result, many traders may have taken a calculated call to collect their profits and exit while there is still time.
However, the future of BTC ETFs is not all gloomy. Although the drop on July 17 was substantial, Bitcoin ETFs have maintained a nine-day winning streak, with daily inflows surging over 300 consecutively until July 16. Additionally, the total daily inflow between July 5 and July 17 has been estimated to be close to $1.97 billion. This is a record-breaking figure in terms of Bitcoin ETF inflow over the past month.
Although BTC ETFs suffered a heavy blow in the US on July 17, global statistics have been quite optimistic. According to official reports, Hong Kong Bitcoin spot ETF inflow for July 17 was pretty impressive, marking a 48.47% rise in daily total inflow. Furthermore, the asset brought in $6.76 million in terms of trading volume. These figures should reinstate a sense of hope among investors regarding the future of Bitcoin ETFs.
In the end, the cryptocurrency market is extremely volatile, with minute factors triggering massive reactions. Although BTC’s current price stands at $64,782.95 at the time of writing, it is likely that the token will continue to surge and claim new highs. As regulatory and macroeconomic landscapes go through an evolving path, Bitcoin ETFs will play a crucial role in the future of cryptocurrency investments and developments.