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Bitcoin and ether In the first major test of a recently launched cryptocurrency exchange-traded fund, shares are rebounding after falling to their lowest level in six months on Monday.
As of early Monday, about $370 billion had been paid wipe The market value of all digital tokens within 24 hours, Bitcoin plummeted below $50,000, and Ethereum suffered its largest single-day decline in three years.
Much of the sell-off was linked to a broader market crash as global stocks fell. What makes this cryptocurrency sell-off different from previous sell-offs is that more investors are left vulnerable due to the newly launched spot crypto ETFs.
Bitcoin ETF started trading in January and subsequently Ethereum Fund last month. For many investors, this is their first exposure to cryptocurrencies and the volatility that comes with them. Net flow data from crypto data firm Coinglass shows that most ETF holders are staying in the game.
Across all spot Bitcoin ETFs, net outflows were approx. $168 million. It is worth noting that the popular IBIT fund consists of black stone No redemptions were seen and Monday’s outflows were a fraction of the funds’ market capitalization of more than $50 billion.
JPMorgan Analysts wrote in a report that Bitcoin ETF spot trading volume more than doubled on Monday from Friday, reaching more than $5.2 billion. The bank added that trading volumes exceeded the first-ever volume in January.
In the Ethereum spot ETF, Over $48 million Trading volumes increased across all funds, with JPMorgan analysts adding there was a “clear rebound” in volume.
Bernstein’s digital asset analysts said in a report on August 5 that unlike previous investments in Bitcoin through cryptocurrency exchanges, which have been difficult to invest in, Bitcoin ETFs are active and “highly liquid,” with daily trading volumes of approximately to US$2 billion.
“We expect additional wireline companies to be approved in Q3 and Q4, providing further access to Bitcoin asset allocation,” they wrote.
Starting from Wednesday, Morgan Stanley will allow its army of 15,000 financial advisors to market spot Bitcoin ETFs issued by BlackRock and Fidelity to clients who meet certain criteria, including a net worth of more than $1.5 million. CNBC has learned.
Until now, Wall Street wealth managers have only facilitated trading if clients specifically requested exposure to new spot cryptocurrency funds. Morgan Stanley is the first major player to allow advisors to proactively recommend Bitcoin allocations to clients.
With pent-up demand, others may follow suit.
Bitcoin’s recent bull run coincides with tens of billions of dollars flowing into new spot cryptocurrency funds. This number can increase dramatically when more financial advisors become involved.
“A lot of companies are in a wait-and-see mode,” Franklin Templeton CEO Jenny Johnson told CNBC in May. “So you haven’t even gotten the second wave yet. This is really the first for early adopters. Wave.”
Franklin Templeton launches Bitcoin and Ethereum spot ETFs.
“I think the next wave is bigger institutions to be more comfortable with how it’s solved,” Johnson said.
But as Bitcoin becomes more of a liquid macro asset, Bernstein analysts expect that for much of the third quarter, the cryptocurrency will be traded primarily on “macro and election cues.”
“If broader equity markets recover amid a Fed response, we would expect Bitcoin and cryptocurrency markets to recover as well,” they wrote.
Analysts at Barclays also noted on Monday that trading volumes in ETF products still pale in comparison to those on cryptocurrency exchanges.
