The cryptocurrency market witnessed a significant downturn on Wednesday, with Bitcoin and Ethereum spot ETFs marking their fifth consecutive day of net outflows. The outflows, which totaled $287.8 million on September 3, underscore the mounting pressure on digital assets as market sentiment turns increasingly bearish.
Massive Outflows Hit Bitcoin Spot ETFs
Leading the outflows was the Grayscale Bitcoin Trust (GBTC), which reported a staggering $50.4 million net outflow in a single day. Fidelity’s Bitcoin spot ETF (FBTC) experienced an even larger exodus, losing $162.3 million in net assets. These redemptions have slashed the total net asset value (NAV) of Bitcoin spot ETFs to $52.7 billion, according to data from SoSo Value.
The exodus from Bitcoin ETFs reflects a broader unease among investors as global markets wobble. Bitcoin itself fell 4.1% to $56,600 within 24 hours, according to CoinGecko. The slump in Bitcoin’s price further fueled sell-offs, leading to liquidations totaling $198.85 million across the crypto market, with long positions accounting for $168.38 million of these losses.
Ethereum Spot ETFs Also Under Pressure
Ethereum spot ETFs weren’t spared from the market turmoil either. The Grayscale Ethereum Trust (ETHE) ETF saw a net outflow of $52.3 million. However, this was slightly offset by Fidelity’s Ethereum spot ETF (FETH), which recorded a $4.9 million inflow. Despite this small positive movement, the total NAV of Ethereum spot ETFs still declined to $6.758 billion.
Ethereum’s price mirrored Bitcoin’s trajectory, slumping 4.3% to $2,400. The combination of declining prices and significant outflows suggests that investors are reevaluating their positions in crypto assets amidst growing uncertainty in the broader financial markets.
Market Turmoil Triggered by Broader Economic Concerns
Kristian Haralampiev, Structured Products Lead at Nexo, attributed the crypto market’s decline to a sharp $300 billion selloff in Nvidia shares, which sent shockwaves through tech equities and digital assets alike. “With the initial excitement from spot Bitcoin ETFs now subdued, Bitcoin is increasingly seen as a speculative asset—favored when market tailwinds are strong, but vulnerable when macroeconomic forces dominate,” Haralampiev told Decrypt.
He further noted that Bitcoin mining has become less profitable due to rising mining difficulty and the halving of block rewards since April. This has led miners to strategically sell their Bitcoin holdings at higher prices, a move that could potentially stabilize the market in the short term.
Analysts at Fairlead Strategies have warned of a potential breakdown in Bitcoin’s price if it falls below $56.5K, which could reinforce a short-term bearish trend. They identified secondary support at $49.3K, suggesting that the current correction phase is far from over.
While the crypto market seeks a bottom, the continued outflows from Bitcoin and Ethereum spot ETFs highlight the cautious stance investors are adopting as they navigate the volatile landscape of digital assets. As macroeconomic uncertainties loom large, the market’s path to recovery remains uncertain, with both short-term and long-term factors weighing heavily on investor sentiment.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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