TL;DR
- Bitcoin price fell close to $64,000 due to major withdrawals from spot ETFs in the US.
- Selling pressure could also be influenced by the transfer of Bitcoin from the German government to exchanges.
- Macroeconomic factors, such as the Fed’s interest rate policy, contribute to the downtrend.
The price of Bitcoin suffered a significant drop, hitting a low of $64,300 on Friday, according to data from TradingView.
This decline comes amid massive withdrawals from spot Bitcoin (BTC) ETFs in the United States, which totaled $139.88 million on Thursday.
The Grayscale BTC Trust (GBTC) saw daily net outflows of $53 million, while the Fidelity Wise Origin Bitcoin Fund (FBTC) saw $51 million in withdrawals.
Other ETFs, such as the Bitwise ETF, also saw sizable withdrawals, with $32 million in outflows.
To a lesser extent, the VanEck Trust and the Invesco Galaxy Bitcoin ETF had outflows of $4 million and $2 million, respectively.
However, not all the news was negative, as BlackRock’s iShares Bitcoin Trust received $1.5 million in inflows.
In addition to the movements in ETFs, another factor that could be contributing to selling pressure is the recent transfer of approximately $195 million in BTC by the German government to exchanges since June 19.
According to Arkham Intelligence, the German government still holds around $3 billion in Bitcoin, but these transfers have added uncertainty to the market.
Hedge funds exposure to Bitcoin has also decreased, with market exposure significantly reducing to just 0.37 over the last 20 trading days, a level not seen since October 2020.
This indicates that institutional investors are being cautious, possibly in response to economic volatility and uncertainty.
Macroeconomic Factors and the Future of Bitcoin
Broader economic policy is also playing a crucial role in Bitcoin’s current bearish trend.
The US Federal Reserve has taken a cautious stance on interest rates, indicating that there will be no cuts until there is more data confirming that inflation is on track to reach its 2% target.
This uncertainty about the future direction of monetary policy is affecting market confidence.
Despite the recent decline and immediate concerns, US spot Bitcoin ETFs maintain a positive cumulative net flow of $14.67 billion, with total net assets of $56.41 billion as of June 20.
This suggests that although there is short-term volatility, interest and investment in BTC through these instruments remains strong.
The combination of large ETF withdrawals, strategic moves by the German government, and hedge fund caution are contributing to selling pressure on BTC.
Additionally, macroeconomic factors, including the Fed’s interest rate policy, are adding another layer of complexity to the picture.
As these various factors continue to develop, it will be crucial to watch how they evolve and affect the price of Bitcoin and the broader cryptocurrency market.
