Key Takeaways:
Cryptocurrencies and related stocks have pared their 3-day losses to notch considerable inflows over the past 24 hours after Bitcoin (BTC) rebounded slightly from its June low.
Bitcoin Drops Below $67K, Causing Cryptocurrencies and Related Stocks to Lose Grip
The world’s largest cryptocurrency by market capitalization began Tuesday’s session by dropping to $66,177 – its lowest valuation for the entire month, before rebounding to $67,300 at noon. The early slide marked Bitcoin’s lowest price level since mid-May.
BTC trading sideways also affected the broader crypto market, with Ethereum (ETH), Solana (SOL), and Binance Coin (BNB) among the major altcoins that suffered significant losses the previous day.
Steven Lubka, the head of private clients at crypto financial services firm Swan Bitcoin, noted that Tuesday’s drop was likely a result of short-term trader positioning and there was “no discernable event” driving it.
Mining Stocks Rebound after Facing a Tough Trading Session on Tuesday
Despite the overall negative market sentiment, cryptocurrency miners came out on top after suffering the hardest hits in early trade. Leading Bitcoin miner Marathon Digital (MARA) saw its stocks gain 1.9% after tumbling over 5% Tuesday morning.
Riot Platforms (RIOT) rose nearly 1% following its 6% nosedive in the morning. CleanSpark (CLSK) reversed its 7% loss in early trading with a 1.6% rebound. Canadian Miner Hut 8 is up 1.8%, pushing its weekly numbers above 12%.
Other crypto-related stocks, such as Coinbase (COIN) and MicroStrategy (MSTR), which recorded massive inflows in Q1 2024, saw considerable outflows over the past week. However, they have managed to get back into the green zone ahead of the Federal Reserve’s policy meeting on Wednesday, 12th June.
Coinbase, one of the world’s largest cryptocurrency trading platforms, was up 2.1% on Tuesday to trade at $241.81. The stock gained 8% in a week, wiping out its previous losses. COIN often trades alongside the crypto market and tends to follow the price and trading volumes of digital currencies.
Business intelligence firm MicroStrategy saw its stocks break out of the red zone by rising 0.25% on Tuesday to trade at $1,599. MSTR has gained 28% in the last 30 days. The stock which closely follows the price of Bitcoin is bullish on its prospects should BTC continue its upward momentum.
MicroStrategy holds the most Bitcoins among publicly traded companies. As of February, the firm held 193,000 BTC, worth approximately $13 billion.
The reason why Bitcoin mining stocks are performing better than other crypto stocks is because of the gains they made when BTC was trading above $71,500, closer to its all-time high.
Spot Bitcoin ETFs End 19-day Inflow Streak
The 19-day inflow streak of spot Bitcoin exchange-traded funds (ETFs) came to an end on Monday after the 11 funds recorded $64.9 million in outflows. The Grayscale Bitcoin Trust (GBTC) and Invesco Galaxy Bitcoin ETF (BTCO) led the outflows at $39.5 million and $20 million respectively.
Meanwhile, BlackRock’s iShares Bitcoin Trust (IBIT) and ARK Invests’ 21Shares Bitcoin ETF (ARKB) fell nearly 3% on Tuesday. IBIT and the Bitwise Bitcoin ETF (BITB) were the only ETFs that recorded inflows on Monday.
Swan Bitcoin’s Steven Lubka explained that while the ETFs backed by Bitcoin have taken in large inflows in the past few weeks, some market participants felt its effect on BTC price has been “muted”.
He said some of these inflows were due to participants shorting futures and buying the ETF by arbitraging the premium of the CME futures market. However, these arbitrage trades were unlikely to account for a large portion of the inflows, added Lubka.
Swan Bitcoin Analyst Says ETF Market is Not Big Enough to Impact Bitcoin Price
Since their launch in January, the 11 spot Bitcoin ETFs have recorded a net inflow of $15.62 billion. The funds saw over $4 billion in inflows within a single day of being listed for trade, which is the largest debut by any ETF in history.
BlackRock leads the charts with an inflow of $17.6 billion. As of May 30th, the investment giant’s iShares Bitcoin Trust (IBIT) holds approximately 292,244 BTC, worth nearly $20 billion. This makes IBIT the largest holder of the apex cryptocurrency among the spot Bitcoin ETF issuers.
Grayscale’s GBTC was the largest Bitcoin-backed investment fund in the market before its conversion to a spot market-traded ETF. At its peak in November 2021, when Bitcoin hit its previous all-time high of $69,000, GBTC had $40 billion worth of BTC in assets under management (AUM).
Since the conversion, the fund has recorded nearly $18 billion in outflows as investors moved to offerings from BlackRock and Fidelity that charged lower fees. Currently, GBTC holds $19.65 billion worth of BTC, dropping to second place.
Explaining why the spot ETFs haven’t managed to impact Bitcoin’s price as investors hoped for, Lubka said the funds are “far from the largest players” in the Bitcoin market where short-term fluctuations are dominated by leverages traders “pushing billions in volume per day”.
Despite Tuesday’s losses, BTC has rallied 60% so far this year. This surge has been largely attributed to the performance of the spot ETFs and April’s reward-halving event that propelled its price to a record high of $73,798 in mid-March.
At the time of writing, Bitcoin (BTC) is trading at $67,220 – down 0.89% in the last 24 hours.
More News: Why Is Bitcoin Down Today? Crypto Market Liquidation Tops $93 Million As BTC And Altcoins Struggle
