The cryptocurrency market experienced a significant shift as spot Bitcoin exchange-traded funds (ETFs) recorded $242.6 million in outflows. This marked the end of an impressive eight-day inflow streak that had seen these funds accumulate $1.42 billion. The decline in Bitcoin’s price, which fell below $62,000 amid rising geopolitical tensions in the Middle East, played a crucial role in this sudden change.
Data from So Value revealed that the 12 major spot Bitcoin ETFs collectively experienced their largest daily outflow since September 3, when $288 million left these investment vehicles. Among the affected funds, Fidelity’s FBTC led the charge with a notable $144.7 million withdrawn. Close behind was ARK 21Shares’ ARKB, which saw $84.3 million exit its accounts. Other funds like Bitwise’s BITB and Van Eck’s HODL also reported substantial losses, withdrawing $32.7 million and $15.8 million, respectively. In contrast, Grayscale’s Bitcoin Trust faced a more modest decrease of $5.9 million.
Interestingly, while the outflows were substantial, trading volumes across the 12 Bitcoin ETFs surged to $2.53 billion on October 1. This uptick suggests that despite the recent volatility, investor interest in Bitcoin remains strong. Since their inception, these funds have attracted a cumulative total of $18.62 billion in net inflows, indicating a sustained demand for Bitcoin exposure.
The sharp outflows from Bitcoin ETFs coincided with escalating geopolitical tensions, particularly following Iran’s missile strikes on Israel. This unsettling news contributed to a dip in Bitcoin’s price, which fell over 3.7%, shedding nearly $4,000 in value within just 24 hours. Bitcoin hit a two-week low at around $60,315 before partially recovering to about $61,500 at the time of writing.
This price decline influenced market sentiment significantly. The Crypto Fear and Greed Index, a measure of investor sentiment, dropped from a neutral reading of 50 to a fear level of 42, indicating that investors are becoming more cautious as geopolitical risks mount.
The turmoil wasn’t limited to Bitcoin. U.S. spot Ether ETFs faced their own outflows, totaling $48.52 million on the same day. Grayscale’s Ethereum Trust led the outflows with $26.6 million withdrawn, while Fidelity’s Ethereum Trust saw $25 million exit. Even Bitwise’s ETHW recorded modest outflows of around $895,650.
Despite these withdrawals, Ether ETFs saw an increase in trading volume, which rose to $290 million from $147.9 million the previous day.These products have accumulated a total of $572.31 million in net outflows, showcasing the challenges faced by investors in the Ethereum market.
At the time of publication, Ethereum was trading at approximately $2,474, reflecting a 6.3% decline as the broader cryptocurrency market grappled with the impact of geopolitical developments and growing investor uncertainty.
The recent outflows from both Bitcoin and Ether ETFs underscore the volatility present in the cryptocurrency market, particularly in the face of external events. As geopolitical tensions continue to influence investor sentiment, many are left to wonder how this will affect the future of cryptocurrency investments.
While the outflows are significant, the sustained trading volumes indicate that interest in cryptocurrencies remains robust. Investors will need to keep a close eye on the developments surrounding these markets, especially as they respond to ongoing global events.
As Bitcoin and Ethereum navigate this turbulent landscape, understanding market dynamics and geopolitical implications will be key for investors looking to make informed decisions in the coming months.
Get the latest Crypto & Blockchain News in your inbox.