Between July 4th and 5th, Bitcoin saw a downturn, which reduced its price to less than $54k. However, Fidelity ETF led a comeback after receiving a massive inflow of $117 million, while Grayscale recorded an outflow of approximately $29 million. In this article, we will explore the recent market downturn, Fidelity’s performance, and Grayscale’s recent outflows.
Crypto Market Chaos Following Bitcoin Downturn to $53k
The crypto market entered pandemonium after the apex cryptocurrency, Bitcoin, fell to as low as $53k. Apparently, this is the first time Bitcoin has touched these levels since February. Moreover, it affected other assets in the crypto market, with Ethereum’s price dropping to less than $3k while the fear and greed index for the crypto market went down to 37.
According to data from Alternative.me, dropping to around 29 in the fear and greed index was the lowest since early January 2023 when bitcoin was trading around $17,000. Apparently, this showed off the massive sell pressure in the market, which is quite different from the levels in March 2024. During that period, it reached as much as 90, with Bitcoin touching a new all-time high of about $73,500.
The primary cause of the downturn was attributed to the sale and transfer of cryptocurrencies from the US and German governments and Mt. Gox. The former Japanese crypto exchange started refunding investors, leading to a severe market reaction.
Fidelity ETF Record a $117 Million Inflow
Fidelity ETF led the recent resurgence in the inflows recorded along Bitcoin ETFs. According to an analysis from Farside Investors, the spot Bitcoin ETFs saw their largest net inflows in a Month, worth around $143.1 million. Fidelity ETF contributed the lion’s share of this Inflow, with a massive $117 million inflow. Apparently, this was after the price of Bitcoin was reduced to less than $54k.
Other spot Bitcoin ETFs, such as Bitwise Bitcoin ETF (BITB), recorded a net inflow of $30.2 million. On the other hand, ARK 21Shares Bitcoin ETF (ARKB) and VanEck Bitcoin Trust (HODL) recorded inflows of $11.3 million and $12.8 million, respectively. Subsequently, the recent inflow was one of the reasons for Bitcoin bouncing back to $57k at the time of writing.
Despite Inflow from Fidelity ETF, Grayscale Records $28 Million Outflow
Grayscale was the only contributor to the outflow recorded on July 5th, with around $28.6 million. Nevertheless, this is not the first time Grayscale’s GBTC has recorded massive outflows, as they are now a significant characteristic of the ETF. Moreover, the primary attribution to the consistent outflows from GBTC is their high ETF fees. Furthermore, other ETFs like IBIT didn’t record any inflow or outflow.
Conclusion
The Bitcoin downturn to less than $54k made the crypto market enter a bearish session, with Ethereum reducing to $2.9k. Apparently, this was mainly due to a lot of Bitcoin transfers from the US and German governments. Moreover, the Japanese defunct crypto exchange Mt. Gox started the distribution of lost assets to investors. In the midst of all this chaos, Fidelity ETF led others to a massive net flow of $143.1 million on the 5th of July. Subsequently, these helped reduce the tension in the market, with Bitcoin increasing to $57k.
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