Bitcoin in Turbulent Tides: The Effect of ETFs on Its Fall
In the vast ocean of digital finance, Bitcoin has long been the guiding light for savvy investors. However, recent storms have rocked its waters, and the horizon appears uncertain.
Since mid-February, US-based Bitcoin spot ETFs have experienced a low tide in their capital flows, recording constant outflows that have drained approximately $5 billion in just over a month. This hemorrhage of funds has exerted downward pressure on the price of Bitcoin, which has seen its value fall from $99,000 to around $95,700.
The symbiotic relationship between ETFs and the underlying asset is undeniable. When investors withdraw their capital from these funds, the managers are forced to sell part of their Bitcoin holdings to cover the outflows, increasing supply in the market and, consequently, exerting downward pressure on the price.
Furthermore, the "buy the rumor and sell the news" strategy has played a crucial role in this dynamic. Many investors, anticipating the launch of ETFs, accumulated Bitcoin in the hope of quick profits. Once the news materialized, they opted to sell their positions, triggering a market correction.
In this context, Bitcoin is navigating turbulent waters, seeking to stabilize while investors evaluate their next moves in the vast ocean of cryptocurrencies.
Bitcoin faces challenges amid record ETF outflows and a bear market.
https://www.investors.com/news/bitcoin-price-short-bitcoin-analyst-eyes-drop-to-73000/
