BTC Selloff Accelerates

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Cryptocurrencies continue to come under pressure amidst massive outflows from spot Bitcoin ETFs, according to analysts.

Bitcoin (BTC) lost 4.88% in value on Monday, with a further -2.0% being recorded on Tuesday.

Grayscale Bitcoin Trust (GBTC) continues to record sizeable outflows, leading to the third-largest wave of liquidation of long positions in cryptocurrencies this year.

"More than $218 million from the positions that were liquidated yesterday, according to data provided by CoinGlass. While Bitcoin, as usual, had the largest share of these liquidations, with approximately $62 million," says Samer Hasn Market, Analyst at XS.com.

Hasn explains GBTC recorded outflows worth $640 million yesterday alone as the bankrupt crypto exchange, FTX, continues to liquidate its assets.

"This ETF, in turn, is also still suffering from the exodus of investors from it, either taking profits after previously buying at a large discount from the net asset value before converting it to an ETF, or moving to other alternatives that are substantially less expensive," he adds.

Above: BTC in USD at daily intervals.

BTC peaked at $49102 as speculation over the SEC's authorisation of Bitcoin ETFs grew, but a post-approval selloff is now underway as it retreats to $38800 at the time of writing. The all-time high of $69,044.77 was reached in 2021 (source), while the three-year low is at $15460.

Hasn says massive outflows from ETFs come after a week that saw net inflows of about $1.25BN into all U.S. spot Bitcoin ETFs, in addition to about $11.8BN in trading volume, according to data provided by CoinShares.

The new ETFs recorded inflows of approximately $4.13BN compared to $2.9BN in outflows since their launch.

"But in the end, all crypto investment products globally recorded outflows of about $21 million last week," says Hasn.

Looking ahead, "vision is quite blurry in the crypto market," he adds.

Investor Peter Schiff notes that Bitcoin ETFs have entered bear market territory after losing more than 20% from their highs.

Schiff also pointed out earlier that Bitcoin bulls have no helpful triggers or narratives to count on after the launch of these ETFs.

"On the other hand, the outflows from Bitcoin spot ETFs may have come for reasons (mentioned above) that are exceptional and temporary. While excluding outflows from GBTC gives a somewhat positive picture, as the impact of those flows fades and the investor base in these funds expands, positive sentiment may gradually return to the market," says Hasn.

"In any case, we are keeping an eye on the performance of Bitcoin ETFs over the coming weeks and months to try to gauge investor sentiment and whether they are taking Bitcoin and its ETFs as a means of short-term speculation only or for long-term investment," he adds.