Bitcoin
Bitcoin Drops Below $67K, ETFs See Outflows Ahead of Fed Meeting, Inflation Data
Key Takeaways
- The price of bitcoin fell below $67,000 on Tuesday morning.
- The release of tomorrow’s CPI data and the Federal Reserve meeting could further impact the price of bitcoin.
- Bitcoin’s price drop followed the first day of net outflows from the bitcoin ETF spot market in 20 days.
- Several cryptocurrency-focused stocks such as Microstrategy, Marathon Digital and Coinbase also fell.
The price of bitcoin (Bitcoin) fell below $67,000 on Tuesday after the bitcoin exchange-traded fund (ETF) spot market saw its first day of net outflows in nearly three weeks on Monday, while bitcoin investors stay nervous ahead of inflation data and an influential interest rate decision.
Bitcoin investors, like investors in other risky assets like stocks, are closely watching the Consumer Price Index (IPC) inflation data released on Wednesday morning and the result of the Federal Reserve Policy Meeting that afternoon.
The inflation print and remarks from Fed Chairman Jerome Powell will inform market expectations about when the central bank will cut rates and how and by how much. Higher rates for longer raised bond yieldsmaking riskier assets like bitcoin less attractive to investors.
Bitcoin ETFs Stagger, Entry Sequence Broken
On Friday, it looked like a new all-time high for bitcoin was coming, with the price approaching the $72,000 mark; however, it has been in decline since then. The price of Bitcoin fell below $67,000 for the first time this month on Tuesday, down about 7% from Friday’s high.
Spot bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (I BITE), GrayScale’s Bitcoin Trust (GBTC) and Fidelity’s Wise Origin Bitcoin Fund (FBTC), which closely monitor the cryptocurrency’s price, also traded lower on Tuesday.
The most recent drop in bitcoin price came after the first day of net outflows for the US bitcoin ETF spot market in 20 days. According to data from Farside Investors, yesterday’s outflows were US$64.9 million.
Last week, flows into bitcoin ETFs were strong, even recording the second strongest day on record since they were launched in January with $886.6 million. However, crypto market analysts pointed that many of the inflows were related to an arbitrage opportunity for traders between the spot ETF and futures markets, which explains why the price did not spike due to the strong inflows.
Bitcoin-related stocks also feel the heat
As bitcoin plummeted, it dragged some of the biggest crypto-related stocks with it.
Microstrategy Stock (MSTR), which held 214,278 bitcoins worth $5.074 billion at the end of the first quarter, fell about 6% in Tuesday trading. Despite this week’s drop, the stock has more than doubled since the beginning of the year.
Bitcoin miners, big and small, also suffered losses in intraday trading. Marathon Digital Holdings (MARA) and riot platforms (REBELLION) saw their shares fall about 6% each. Among the smaller miners, Hut 8 (CABIN) shares fell 8%, CleanSpark (CLSK) shares fell 7% while Bitdeer (BTDR) shares fell about 5%.
Shares on crypto trading platforms such as Coinbase Global (COIN) were 5% lower, while Robinhood (HOOD) shares fell more than 3%.