As the crypto market plunged Wednesday, Bitcoin spot ETFs marked their fifth consecutive day of negative flows, with $287.8 million in net outflows on September 3.
The Grayscale Bitcoin Trust (GBTC) ETF reported a single-day net outflow of $50.4 million, while Fidelity's FBTC saw an even larger outflow of $162.3 million. These outflows have reduced the total net asset value of Bitcoin spot ETFs to $52.7 billion, according to data from SoSo Value.
Simultaneously, Ethereum spot ETFs recorded a total net outflow of $47.4 million, with Grayscale's (ETHE) ETF experiencing an outflow of $52.3 million, partially offset by Fidelity's (FETH) with an inflow of $4.9 million. The current total net asset value of Ethereum spot ETFs stands at $6.758 billion, data shows.
Crypto market faces sell-offs
The crypto market is trading under considerable sell pressure, with cryptocurrency prices plunging Wednesday morning following a stock market rout.
Per data from CoinGecko, Bitcoin (BTC) dropped 4.1% to $56,600 over the past 24 hours, while Ethereum (ETH) slumped 4.3% to $2,400.
These significant outflows and price declines have led to substantial market liquidations, totaling $198.85 million across the whole crypto market according to data from Coinglass.
Long positions accounted for $168.38 million of these liquidations, while short positions made up the remaining $30.47 million.
Speaking with Decrypt, Kristian Haralampiev, Structured Products Lead at Nexo said the crypto market drop was likely triggered by a sharp $300 billion Nvidia selloff, with investors left questioning whether the Fed’s desired "soft landing" might inadvertently lead to a more abrupt downturn in tech equities and digital assets.
“With the initial excitement from spot Bitcoin ETFs now subdued, Bitcoin is increasingly seen as a speculative asset—favored when market tailwinds are strong, but vulnerable when macroeconomic forces dominate,” Haralampiev said.
He added that with mining difficulty at an all-time high and block rewards halved since April, the profitability of mining has sharply declined and in response, miners could strategically sell their Bitcoin holdings at higher prices, potentially driving market prices up.
This approach could create a better price equilibrium that secures their production costs and sustains operations.
“In the short term, this could be one of Bitcoin’s main drivers to recovery. Long-term, Bitcoin’s success may hinge on its ability to cement itself as the world’s most innovative and tradable reserve asset,” Haralampiev added.
In a note sent to Decrypt, analysts at Fairlead Strategies stated that short-term oversold conditions are in place, suggesting a few days of stabilization are likely.
However, they caution that a breakdown from the range below around $56.5K would “support a short-term bearish bias."
The analysts further suggested that Bitcoin’s intermediate-term correction remains in force, with secondary support at $49.3K.