Source: Zhitong Finance
Bitcoin experienced its biggest monthly decline since the FTX crash.
Bitcoin experienced its biggest monthly decline since the collapse of Sam Bankman-Fried's FTX empire as investor demand for US Bitcoin ETFs cooled. Bitcoin fell nearly 16% in April, only slightly lower than the November 2022 decline. The frenzy sparked by US ETFs pushed Bitcoin to a record high of nearly $74,000 in March, but as expectations for the Fed's interest rate cuts weakened, demand for high-risk investments was hit, and capital inflows into Bitcoin products have been drastically reduced.
Bitcoin records worst monthly performance since FTX crashed
On Tuesday, the price of Bitcoin plummeted by nearly 5% to around $60,000. Tokens such as Ethereum and Solana dropped even more. Crypto-related stocks also fell, with MicroStrategy (MSTR.US) plummeting 18%, Marathon Digital (MARA.US) falling 11%, Riot Platforms (RIOT.US) falling nearly 9%, and CleanSpark (CLSK.US) falling nearly 10%.
As of April 29, 11 US spot Bitcoin ETFs had a net outflow of US$182 million for the month. These funds had a net inflow of $4.6 billion in March. The US Securities and Exchange Commission (SEC) approved these funds in January of this year.
US Bitcoin ETF sees first monthly outflow
Seth Ginns, managing partner of Coinfund and head of liquidity investment, said on Tuesday: “ETFs have created a new investment channel that has been widely welcomed, far exceeding anyone's expectations.” This “caused Bitcoin to rise rapidly, far exceeding expectations.”
The quadrennial Bitcoin halving is highly anticipated. This move has reduced the supply of new bitcoins in the market and has historically played a role in driving prices, but since Bitcoin halving occurred on April 19, its impact has been minimal.
Market watchers have been looking for new tailwinds in Asia and are closely watching Bitcoin and Ethereum spot ETFs listed in Hong Kong, China, but Tuesday's ETF listing failed to inspire investors' confidence. According to data compiled by Bloomberg, the total trading volume of these six new ETFs on the first trading day was $11 million. This is far from the total trading volume of $4.6 billion when the 10 US spot Bitcoin products debuted.
“Prior to the launch of the Hong Kong ETF, the market established some irrational expectations,” K33 Research analysts said.