The largest exchange-traded Bitcoin (BTC) fund lost half of its assets under management last Friday, which could exacerbate Bitcoin’s slide on Saturday.
The Purpose Bitcoin ETF saw an outflow of 24,510 bitcoins on Friday, the steepest one-day buyback since the fund debuted on the Canadian stock exchange in April 2021, according to Norway-based Arcane Research.
Arcane wrote in a report that the outflows meant that the fund had to sell about $500 million in BTC at the Friday price, adding to selling pressure in the already shaky crypto market.
“It is likely that the massive outflows were caused by the seller being forced to sell as part of a massive sale,” wrote analyst Arcane Vetle Lunde. “The forced sale of 24,000 BTC may have led to a downward movement of BTC towards $17,600 this weekend.”
The Purpose Bitcoin ETF saw an outflow of 24,510 BTC last Friday, resulting in the loss of half of its assets under management in a single day. (Arcane Research)
Bitcoin (BTC) broke below $20,000 on Saturday, dropping to $17,678. Traders were alarmed by fears of bankruptcy in the credit sector. encryption– Currencies, as crypto lender Celsius Network halts customer withdrawals, BlockFi seeks additional funding, and cryptocurrency hedge fund Three Arrows Capital confirms it has incurred heavy losses.
The price action over the weekend marked the first time that the largest cryptocurrency fell below its all-time high from the previous session, recorded in December 2017, at $19,783.
ProShares Futures ETF has become the largest ETF in history.
Bitcoin ETFs track the value of Bitcoin and provide a way to invest in the largest cryptocurrency without having to deal directly with the cryptocurrency; It can be bought, sold and traded on traditional exchanges instead of cryptocurrency trading platforms. On the same topic: Are sanctions a good thing? Why are Bitcoin, Ethereum and Dogecoin recovering so well today?. ETFs actively add and sell bitcoins to match investors who invest in or redeem the fund.
Purpose Bitcoin ETF was by far the largest traded product stock trading Focused on bitcoin, it handled nearly 48,000 bitcoins ahead of Friday’s recoveries. Today, the fund owns only about 23,300 bitcoins.
Another bitcoin-focused fund, the 3iQ CoinShares Bitcoin ETF, has experienced massive inflows in the past month, selling 7,401 BTC of its holdings.
After last week’s outflows, the Purpose Bitcoin ETF lost its first position in the New York Stock Exchange-listed ProShares Bitcoin Strategy ETF (BITO), which holds futures contracts on bitcoin rather than bitcoin cash.
Last week, BITO saw the second largest net inflow since its launch last October, which saw the fund increase its exposure to bitcoin by the equivalent of 4,115 BTC. Data shows that the fund manages $668 million in assets, equivalent to about 31,500 bitcoins.
The discrepancy suggests that “at least some US investors view current bitcoin selling as an attractive entry point, taking advantage of forced sellers” for a near-term relief recovery, writes Lunde in an Arcane Research report.
Overall, crypto funds that manage bitcoin received $28 million in inflows last week and appear to be benefiting from weak prices, crypto fund provider CoinShares reported Monday.
« L’opinion parmi les investisseurs est extrêmement polarisée, certains voyant cela comme une grande opportunité d’achat, tandis que d’autres sont effrayés, liquidant des positions », a déclaré James Butterfill, responsable, de la Coin Shares che e-mail. Fund flows are likely to remain mixed.