Bitcoin ETF Will Face a New Downtrend, Here’s Why
Amid a broader selloff in the crypto market, concerns about the direction of the Bitcoin Exchange Traded Fund (ETF) have intensified following a recent report pointing to a new bearish trend for the investment vehicle. The Deposit Trust Corporation’s (DTCC) recent announcement regarding collateral values of ETFs containing BTC or other cryptocurrencies is noteworthy. Concerns among investors.
DTCC Announcement Shook Bitcoin ETF Investors
US Spot Bitcoin ETFs have witnessed a topsy-turvy scenario recently, as evidenced by significant outflows this week. Meanwhile, this has raised concerns among investors about the waning interest of Wall Street players in the flagship cryptocurrency. Moreover, this move also seems to have contributed to the recent sell-off in the crypto market.
Meanwhilein the middle of thisA recent report from 10X Research cast shade on the BTC ETF landscape, citing the DTCC’s decision to impose a 100% cut on cryptocurrency-exposed ETFs starting April 30. This move has increased speculation about a potential reversal in Bitcoin ETF inflows, especially at a time when the cryptocurrency market is grappling with rising volatility and a significant outflow from US Spot BTC ETFs.
Source: 10X Research, X
Especially, DTCC’s decision to withhold collateral value from ETFs containing cryptocurrencies as underlying assets sent shockwaves through the digital asset market. With Bitcoin making lower highs, 10X Research has seemingly predicted a new downtrend for the Bitcoin ETF. When taken into account, Market participants’ concerns The potential implications of DTCC’s stance on Bitcoin ETFs appear to be growing.
Also Read: Bitcoin Wallets Are Soaring As Active Wallets To Counter These Crypto Drops
DTCC’s Announcement Comes Amid a Significant Exodus
DTCC’s latest statement sent shockwaves through the financial community, particularly affecting BTC ETFs. DTCC has been discontinued with immediate effect allocation Underwriting ETFs linked to Bitcoin or cryptocurrencies poses significant challenges for investors.
In the meantime, this decision is before us. implementation Changes to collateral values beginning April 30, 2024 that will affect selected securities in the Collateral Monitor. Notably, DTCC’s move means a 100% cut for crypto-exposed ETFs, raising concerns about their viability and potential market repercussions.
Additionally, the decision comes amid a massive outflow in US Spot Bitcoin ETFs this week. For context, Total The US Spot BTC ETF witnessed an outflow of $328 million this week. In particular, the total Bitcoin ETF outflow in the last three days until April 26 amounted to $421.8 million.
Also Read: Former Grayscale Director Warns Bitcoin Price Will Drop to $52,000
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A seasoned professional with 3 years of experience in the financial market, Rupam has honed his skills as a meticulous research analyst and insightful journalist. She enjoys exploring the dynamic nuances of the financial landscape. Currently working as a sub-editor at Coingape, Rupam’s expertise goes beyond traditional boundaries. His contributions include breaking news, examining AI-related developments, providing real-time crypto market updates, and providing insightful economic news. Rupam’s journey is marked by his passion to demystify the intricacies of finance and deliver impactful stories that will resonate with diverse audiences.
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