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Bitcoin ETFs Experience Significant Outflows Amid Economic Uncertainty

U.S.-listed spot bitcoin exchange-traded funds (ETFs) experienced a second consecutive day of outflows as traders moved to mitigate risk ahead of crucial macroeconomic announcements scheduled for later Wednesday.

According to data from SoSoValue, the eleven ETFs saw net outflows totaling $200 million on Tuesday, the highest since the $580 million outflows recorded on May 1. This sell-off coincided with a brief dip in BTC prices to $66,200 before a quick recovery.

Grayscale’s GBTC bore the brunt of these outflows, accounting for $120 million of the total. GBTC continues to be the worst-performing ETF by outflows since its inception in January, amassing a staggering $18 billion in cumulative outflows. Other ETFs, including Ark Invest’s ARKB, Bitwise’s BITB, Fidelity’s FBTC, and VanEck’s HODL, recorded outflows ranging from $56 million to $7 million, with no inflows reported for any of the funds.

Market analysts attributed these outflows to traders’ derisking actions ahead of the Consumer Price Index (CPI) reading on Wednesday and the conclusion of the two-day Federal Open Market Committee (FOMC) meeting today, where the Federal Reserve’s monetary policy decisions will be announced.

“Markets are in risk-off mode ahead of CPI and FOMC tomorrow. This month’s FOMC will also release the Dot Plot, indicating how many rate cuts the Fed anticipates for the remainder of 2024,” noted Singapore-based QCP Capital in a broadcast message on Tuesday. Despite the short-term challenges, QCP Capital maintains a long-term bullish outlook.

“Despite short-term headwinds, we think this might be a good opportunity to accumulate coin. Bullish events on the horizon, such as the potential launch of an ETH spot ETF and the political battle for the crypto vote between Biden and Trump, support our positive long-term view,” QCP stated.

Additional potential market movers include Treasury Secretary Janet Yellen’s speech on Friday, which could influence riskier assets such as cryptocurrencies based on her comments, as previously reported.

This period of volatility underscores the importance of staying informed about macroeconomic factors and their potential impact on cryptocurrency investments.

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Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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