The crypto ETF market saw significant outflows on October 1, 2024, with over $290 million withdrawn from U.S. spot Bitcoin (BTC) and Ethereum (ETH) ETFs. The downturn comes amid rising geopolitical tensions in the Middle East, causing sharp price drops for both Bitcoin and Ethereum.
According to SoSoValue data, Bitcoin ETFs bore the brunt of the outflows, with $242.53 million in withdrawals. Meanwhile, Ethereum ETFs saw $48.52 million in outflows, marking a challenging day for crypto investments.
Bitcoin ETF Struggles with Massive Outflows
Bitcoin ETFs experienced significant pressure, with over $240 million withdrawn across major funds. Fidelity’s Wise Origin Bitcoin Fund (FBTC) led the exits, suffering $144.67 million in net outflows, marking its largest day of losses in recent history. This contrasts sharply with the previous week, when Bitcoin ETFs amassed over $1 billion in net inflows.
Other Bitcoin ETFs also faced withdrawals, including the ARK 21Shares Bitcoin ETF (ARKB), which shed $84.35 million. Additionally, BingX and VanEck’s Bitcoin ETF (HODL) saw outflows of $32.7 million and $15.75 million, respectively. Grayscale’s Bitcoin Trust (GBTC) recorded a more modest outflow of $5.9 million.
In contrast, BlackRock’s iShares Bitcoin Trust (IBIT) stood out as the only Bitcoin ETF to post positive inflows, securing $40.84 million on the day, pushing its cumulative net inflows to over $21.54 billion. This comes as Bitcoin briefly rebounded to $61,450 after a 4% drop, following reports of Iran’s missile attack on Israel, which also caused U.S. stock indices to fall by 1%.
Ethereum ETFs Mirror Bitcoin’s Trend
Similar to Bitcoin, Ethereum ETFs followed the same downward trajectory, with $48.52 million in total outflows. Fidelity’s Ethereum Fund (FETH) led the exits, seeing $24.97 million in outflows, marking its largest single-day loss. Grayscale’s Ethereum Trust (ETHE) also posted significant outflows of $26.64 million, adding to its ongoing trend of withdrawals, which now total nearly $3 billion in cumulative net outflows.
The Bitwise Ethereum ETF (ETHW) saw smaller outflows of $895,650, while VanEck’s Ethereum Trust (ETHV) bucked the trend, recording modest net inflows of $2.74 million. The 21Shares Core Ethereum ETF (CETH) also posted $1.25 million in inflows, its largest since early August.
These outflows came as Ethereum experienced a sharp 6.5% price drop, hitting a low of $2,450 amid the same geopolitical tensions that impacted Bitcoin. Although Ethereum showed some recovery, the overall market remains cautious as investors brace for further turbulence.
Rising Geopolitical and Regulatory Pressures
The escalating conflict between Iran and Israel has increased market volatility, affecting both cryptocurrencies and traditional financial markets. Investors are becoming increasingly cautious, preparing for potential economic disruptions. Additionally, the crypto sector faces growing regulatory scrutiny in the U.S., with the Securities and Exchange Commission (SEC) intensifying oversight. Ongoing legal battles involving major crypto players like Coinbase and Ripple over unregistered securities claims further contribute to market uncertainty.
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