Exchange-traded fund (ETF) investors have withdrawn nearly $1.82 billion from spot Bitcoin and Ether ETFs that are based in the US over the last five trading days, with the weakening of market sentiment following the precious metals rally. According to Farside, spot BTC ETFs lost $1.49 billion, while spot Ether ETFs experienced $327.10 million in net outflows.
ETF Outflows
The outflows coincide with the spot prices of both cryptocurrencies dropping, despite brief signs of their recovery. BTC and Ether prices have dropped 6.55% and 8.99%, respectively, over the last week and are now trading at $83,400 and $2,685, according to CoinMarketCap. The price of Bitcoin has declined by 5.13% in the past 30 days.
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Analyst Perspectives
Eric Balchunas, an ETF analyst, described the negativity around Bitcoin’s recent price action in relation to gold and silver as “very short-sighted”.
“Bitcoin spanked everything so badly in ’23 and ’24,” Balchunas said, pointing out that people appear to have forgotten that. Matt Hougan, the chief investment officer of Bitwise, stated on X on January 15 that “If ETF demand continues over the long term, Bitcoin’s price will go parabolic.”
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Market Outlook
The recent withdrawal of funds and drop in prices have changed the sentiment of the market. Some analysts even warn of a possible leverage shakeout. On the other hand, the same analysts believe that long-term investors can use this situation to buy BTC and Ether at discounted prices.
To sum up, the crypto market is going through a turbulent phase as investors are cashing out their BTC’s and Ether-related ETFs. While certain analysts interpret such behaviour as a bad sign, others argue that it gives one a chance to buy at a discount.
Also Read: BTC 7% Plunge as Gold Rally Defies Bulls
