Altcoins
Bitcoin plunges: Altcoins in turmoil
12:00 p.m. ▪ 3 min reading ▪ by Evans S.
The flagship Bitcoin saw a sharp decline, dragging altcoins with it. Massive net outflows from Bitcoin ETFs (exchange traded funds) have only made the situation worse. So, what exactly is happening in this market?
Bitcoin ETF: a tsunami of outflows
ETFs have suffered a real hemorrhage. In a single day, US Bitcoin ETFs saw net outflows of $226.21 million.
Fidelity’s FBTC, in particular, saw $106 million leave its coffers, marking one of its worst days since its inception.
These massive outflows reflect a change in sentiment among institutional investors.
Shades of grey GBTC and 21Shares’ Ark Invest and ARKB were not spared, with outflows of $62 million and $53 million, respectively.
Even Bitwise and VanEck’s funds saw outflows of around $10 million each.
The only bright spot came from BlackRock’s IBIT fund, which attracted $18 million. A little spark in a stormy sea.
Impact on Bitcoin Price and Altcoins Reaction
Bitcoin saw its price fall by 1.48% in 24 hours, reaching $66,704. This decline, although modest, had notable repercussions on the altcoin market. Indeed, when the king of cryptos stumbles, his subjects immediately feel the effects.
Ethereum and most altcoins fell alongside Bitcoin. However, one cryptocurrency stood out: Telegram’s Ton.
Despite the decline of Bitcoin, TON tried to maintain its position. Having reached a record high of $7.87, this token is now aiming for a new ambitious target of $8. The Chaikin Money Flow, a key indicator, shows significant buying pressure, supporting this potential upside. Besides, you even dethroned Ethereum in terms of active addresses.
However, the path to stability remains strewn with pitfalls.
A glimmer of hope ?
While Bitcoin falters, ether could come out on top. The US SEC plans to rule on ether spot ETFs during the summer.
This news has sparked optimism among investors, who hope that these funds will attract a considerable share of the investments currently directed towards Bitcoin ETFs.
JPMorgan analysts estimate that these spot ether funds could capture up to 20% of current Bitcoin ETF flows.
However, this prospect is not without challenges. Regulatory uncertainty has led issuers to exclude staking components from these ETFs, making these products less attractive to institutional investors. Gordon Grant, a crypto derivatives trader, even expressed doubts about their immediate success.
The question remains: will Bitcoin manage to reverse the trend, or are altcoins doomed to suffer the same waves of volatility? The coming months will be crucial for investors, who will need to navigate with caution. In the meantime, MicroStrategy invests $500 million.
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Evans S.
Fascinated by bitcoin since 2017, Evariste has never stopped researching the subject. If his first interest was in trading, he is now actively trying to understand all the advances centered on cryptocurrencies. As an editor, he aspires to continually deliver high-quality work that reflects the state of the industry as a whole.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.