Bitcoin
Bitcoin Price Swings as Bitcoin ETFs See Outflows
Key Takeaways
- The price of Bitcoin fell below $57,000 from around $64,500 last week before recovering again to the $64,000 level on Saturday.
- Amid falling prices, the bitcoin ETF spot market saw its biggest outflows ever in a single day on Wednesday.
- Binance founder and former CEO Changpeng Zhao was sentenced to four months in prison for violations of the Bank Secrecy Act during his time as head of the cryptocurrency exchange.
- In its Q1 2024 shareholder letter, fintech company Block revealed that it will invest 10% of its monthly gross profits from bitcoin-related products into bitcoin purchases going forward.
Bitcoin (Bitcoin) the price fell below $57,000 on Wednesday from around $64,500 last Monday before recovering in what has been a strange week. Investors Seemingly Angry About Spot Bitcoin exchange-traded funds (ETFs) last week, with Wednesday bringing record single-day net outflows.
In addition to bitcoin price fluctuations, the last week saw the sentence of Binance founder and former CEO Changpeng Zhaotogether with the fintech company Block’s (SQUARE) announcing Thursday that it will buy more bitcoin with a portion of its profits.
Bitcoin ETFs see record outflows
Spot bitcoin ETFs ended the week with investors withdrawing more money than they brought in, thanks to a record net outflow of US$563.7 million on Wednesday amid price fluctuations of the underlying crypto asset.
That day, Blackrock’s iShares Bitcoin Trust (I BITE) experienced outflows for the first time since its trading debut on Jan. 11, with a net $36.9 million leaving the fund. Fidelity Wise Origin Bitcoin Fund (FBTC) also saw a record fund outflow of $191.1 million in a single day last week.
So far, these ETFs have been the two most popular options among new investors looking for market exposure. bitcoin ETF spot market.
But that wasn’t the only surprise when it came to spotting bitcoin ETF flows last week.
Bitcoin Trust in Grayscale (GBTC), the largest bitcoin ETF by assets and the target of the biggest and most constant outflows to date, recorded its first net inflows on Friday, according to data from Farside Investors. GBTC recorded net inflows of $63 million that day, but has seen a net $17.46 billion leaving the fund since January 11. commission rate than other options on the market of 1.5%.
despite the exits, some analysts have suggested that investors may not need to be overly concerned. Demand from spot bitcoin ETFs was credited for bitcoin’s rally earlier this year, but that may not be the only influence on bitcoin prices going forward, Coinbase analysts said.
“While this indicates a slowdown in capital flows into the asset class via the ETF product, we believe ETF flows (while important) only drive a portion of BTC price discovery given the global and deeply liquid markets in centralized exchanges (CEXs),” said Coinbase analysts David Han and David Duong in a commentary on Friday.
Former Binance CEO gets four months in prison
Former Binance CEO Zhao received a four-month prison sentence in a Seattle courtroom last Tuesday. In November, Zhao stepped down from his role as head of the world’s largest cryptocurrency exchange after pleading guilty to violating US rules. Bank Secrecy Law. This guilty plea resulted in Binance paying approximately US$4.3 billionmarking one of the most significant corporate resolutions involving criminal charges against an executive in history.
Zhao’s relatively short prison sentence was contrasted with that of former FTX CEO Sam Bankman-Fried, who received a 25-year sentence relating to the fraudulent use of client funds. Of course, a key difference in these cases was that Zhao was not accused of misusing client funds.
The founders of the Samourai Wallet bitcoin wallet were also recently stuck over allegations relating to insufficient anti-money laundering standards.
Block to put 10% of profits from Bitcoin products into Bitcoin
Blockthe company behind fintech products like Cash App and Square, said it will invest 10% of its gross profit from its bitcoin-related businesses to buy more bitcoin every month.
For context, Block’s first quarter gross profit of bitcoin via Cash App increased 59% year over year to $80 million. Cash App’s bitcoin revenue from customer sales in the period was $2.73 billion, an increase of 26% compared to the same period last year. However, only about 3% of the company’s resources are allocated to Bitcoin-related projects.
“We were one of the first public companies to put bitcoin on our balance sheet: we invested $220 million in bitcoin, and that investment grew approximately 160% to $573 million at the end of the first quarter,” said Jack Dorsey, CEO of Block. said in the letter.
What to expect from the markets this week
Investors and market watchers will be looking for more clues about any additional regulatory actions in the cryptocurrency markets.
Monday started with Robinhood (Image: Disclosure)HOOD) disclosing that he received a warning from Wells from the Securities and Exchange Commission (SEC) in early May regarding his crypto business and that may face coercive action of the regulator. The action could be similar to those the SEC took against Coinbase (COIN) and Kraken last year related to their registration as brokers for the sale of cryptographic tokens that it considers unregistered securities.