Bitcoin and Other Cryptocurrencies Drop Despite Strong Inflows into ETFs
Bitcoin and other cryptocurrencies experienced a drop early Tuesday despite strong inflows of money into exchange-traded funds tied to Bitcoin. The largest crypto, Bitcoin, was down 3.5% over the past 24 hours to $67,028, after hitting a record high near $74,000 in mid-March.
According to analyst Matteo Greco from Fineqia International, BTC spot ETFs continued to see strong inflows, marking the fourth consecutive week of net inflows. However, these inflows don’t seem to be enough to boost the price as traders are buying spot bitcoin ETFs while simultaneously selling futures linked to the cryptocurrency to profit from the futures market premium. This selling pressure from the futures trade keeps the price in equilibrium.
Ether, the second-largest crypto, was also down 4% at $3,528 but has seen a 21% increase over the past month. The Securities and Exchange Commission recently approved critical rule changes to allow spot Ether exchange-traded funds to trade, but it may still take weeks or months before issuers receive final permission to launch the products.
Smaller cryptos, or altcoins, were also in the red, with Solana falling 3.4%, Cardano losing 1.8%, and Dogecoin dropping 2.4%. The overall cryptocurrency market seems to be experiencing a downward trend despite the inflows into Bitcoin ETFs.
For more updates on the cryptocurrency market, you can reach out to Adam Clark at adam.clark@barrons.com.
