Bitcoin fell sharply to $112,000, causing US crypto ETFs to lose $1 billion in a single day. The biggest withdrawals came from Fidelity’s FBTC and Grayscale’s GBTC funds, showing caution among investors after weeks of volatile prices.
Ethereum ETFs also saw large losses. Fidelity’s FETH fund lost $156 million. Overall, the crypto market dropped 1.5%, with Ethereum down to $4,162. Traders sold some holdings ahead of the Federal Reserve’s announcements, unsure about possible interest rate changes.
Despite the losses, Bitcoin ETFs still hold $150.9 billion in total assets. BlackRock and Fidelity control almost 75% of all ETF-held Bitcoin. BlackRock’s IBIT alone manages 60% of Bitcoin ETFs. Ethereum EFTs are maintaining strong inflows, even after some recent withdrawals, amounting to a cumulative of $12 billion.
The volatility also affected crypto derivatives. Over $450 million in positions were liquidated in the past day. Bitcoin and Ethereum accounted for 73% of these losses, showing the risks of leveraged trading. Experts say the drop comes from profit-taking and the high number of investors holding gains.
ETF inflows had been strong in early August, pushing Bitcoin higher. Spot Bitcoin ETFs saw $230.9 million in inflows just last week. But in the past few days, outflows reached $121.8 million and $141.4 million. Ethereum ETFs saw a similar pattern, with strong buying turning into withdrawals.
Institutional demand for Bitcoin is still quite strong. BlackRock and Fidelity are continuously buying more Bitcoin, bringing a measure of stability to the market. Grayscale's GBTC has fallen well behind, holding far less than it did at a previous time. Analysts find that it's this very strong institutional demand that supports the cryptocurrency whenever it suffers a price drop.
Investors have eyes set upon the Jackson Hole Symposium. Any remarks from Federal Reserve Chair Jerome Powell on rate changes could keep crypto prices moving. The Crypto Fear & Greed Index shows increasing fear among traders, setting a tone of caution.
The big dip today is another lesson on the volatility of Bitcoin, yet more evidence is presented of the strength of institutional interest. This is seen by analysts as a buying opportunity for those with a long view. Amid short-term volatility, Bitcoin keeps standing tall as the leading crypto.
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