Cryptocurrency market confronts downturn as investors withdraw from ETFs
Date
3/19/2024 7:58:35 AM
(MENAFN) On Tuesday, the cryptocurrency market, led by Bitcoin, faced a notable downturn as investors pulled out funds from major exchange-traded funds (ETFs). Bitcoin, the flagship cryptocurrency, experienced a 3 percent drop, settling at USD65,380, while other prominent CryptoCurrencies like Ethereum, Solana, and Dogecoin mirrored similar declines.
This downward trend coincided with significant capital outflows from the Grayscale Bitcoin Trust Fund, the largest crypto-traded fund on the stock exchange, valued at USD25 billion. Approximately USD643 million worth of investments exited this fund, marking the most substantial withdrawal since its conversion into a traded fund in January.
The negative trend wasn't confined to the Grayscale fund alone; other funds also witnessed outflows, with a collective net exit of nearly USD154 million from a cluster of 10 ETFs on March 18. Despite Bitcoin ETFs accumulating investments totaling USD12 billion since their inception, the recent decrease in demand for these products can be attributed to mounting inflationary pressures and the anticipation of a pullback in monetary policy easing by the US Federal Reserve.
Overall, these developments highlight a shifting sentiment among investors, with concerns about inflation and monetary policy adjustments weighing on the appeal of cryptocurrencies as investment vehicles.
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