Bitcoin ETF To Face A New Downtrend, Here’s Why
Highlights
- A recent report indicated a potential downtrend for the Bitcoin ETF.
- U.S. Spot Bitcoin ETFs witness outflows, raising worries about Wall Street interest.
- The investors remained cautious amid the growing uncertainties over the Bitcoin ETFs.
Amid a broader crypto market selloff, concerns over the trajectory of the Bitcoin Exchange-Traded Fund (ETF) have intensified following a recent report signaling a new downtrend for the investment instrument. Notably, the recent announcement from the Deposit Trust Company (DTCC) regarding collateral values for ETFs containing BTC or other cryptocurrencies has fueled concerns among investors.
DTCC Announcement Rattles Bitcoin ETF Investors
The U.S. Spot Bitcoin ETFs have witnessed a topsy-turvy scenario lately, as evidenced by the significant outflows this week. Meanwhile, this has raised concerns among investors over a cooling interest from the Wall Street players toward the flagship crypto. In addition, this move seems to have also contributed to the recent crypto market selloff.
Meanwhile, amid this, a recent report from 10X Research has cast a shadow over the BTC ETF landscape, citing the DTCC’s decision to apply a 100% haircut to ETFs with cryptocurrency exposure starting April 30. This move has raised speculation about a potential reversal in Bitcoin ETF inflows, particularly as the cryptocurrency market grapples with heightened volatility and a significant outflow from U.S. Spot BTC ETFs.
Notably, the DTCC’s decision to withhold collateral value from ETFs featuring cryptocurrencies as underlying assets has sent shockwaves through the digital asset market. With Bitcoin making lower highs, 10X Research predicted a new downtrend seemingly in place for the Bitcoin ETF. Considering that, the market participants’s concerns seem to be mounting over the potential implications of the DTCC’s stance on Bitcoin ETFs.
Also Read: Bitcoin Wallets Rising Quickly As Active Wallets for These Crypto Drop
DTCC’s Announcement Comes Amid Notable Outflux
The recent declaration from DTCC has sent shockwaves through the financial community, particularly impacting BTC ETFs. Effective immediately, DTCC has halted the allocation of collateral to ETFs linked to Bitcoin or cryptocurrencies, posing significant challenges for investors.
Meanwhile, this decision comes ahead of the implementation of amendments to collateral values starting April 30, 2024, affecting select securities in the Collateral Monitor. Notably, DTCC’s move implies a 100% haircut for ETFs with crypto exposure, raising concerns about their viability and potential market repercussions.
Besides, the decision comes amid a massive outflow noted in the U.S. Spot Bitcoin ETFs this week. For context, the total U.S. Spot BTC ETF has witnessed an outflow of $328 million this week. Notably, over the last three days through April 26, the Bitcoin ETF outflow totaled $421.8 million.
Also Read: Ex-Grayscale Director Warns Bitcoin Price Crash To $52000
- John Bollinger Sees ‘W’ Bottom Forming in Ethereum and Solana, Not Bitcoin
- Robert Kiyosaki Calls Bitcoin and Ethereum ‘Real Money,’ Urges Investors to Ditch ‘Fake’ Fiat
- ‘Sell Gold, Buy Bitcoin’: Expert Flags Major Market Bottom Signal
- Ripple Makes ‘Unusual’ $500M Transfer Amid $1 Billion XRP Treasury Plans
- ‘I’m Going Bonkers’: Dave Portnoy Says He’ll Buy XRP Again If It Dips Below This Level
- Solana Price Prediction: Analyst Notes Bearish Breakdown Amid Derivatives Slowdown
- Shiba Inu Price Eyes Recovery as Burn Rate Jumps 10,785% – Can SHIB Hit $0.000016?
- Ethereum (ETH) Price Prediction: Analyst Eyes $7,000 by Q4 as Bitmine Accumulates $281M ETH — Will History Repeat Itself?
- HYPE Price Teeters Amid Weak Technicals and Soaring Liquidations
- XRP Price Prediction As Ripple Announces $1B Treasury Plans – Is a Rebound Imminent?
- Bitcoin Price Prediction Amid Gold’s Parabolic Rally to Second-Largest Reserve Asset
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
