On Tuesday, the price of Bitcoin exhibited minimal movement, adhering to the lower boundary of a trading range established over the past month, as investors continued to withdraw from U.S.-listed cryptocurrency investment products.
Despite the launch of spot exchange-traded funds (ETF) in Hong Kong, market excitement remained subdued as investors awaited clarity on the extent of Asian demand for cryptocurrencies. It’s worth noting that Hong Kong’s capital markets are notably smaller compared to those in the U.S.
Bitcoin experienced a modest 1.6% increase over the preceding 24 hours, reaching $63,423.3 by 01:26 ET (05:26 GMT).
Sustained outflows from Bitcoin ETFs were observed, with data from digital assets manager CoinShares revealing a third consecutive week of capital outflows totaling $345 million, marking the largest outflow since March. Notably, Bitcoin net outflows surged to $423 million, largely due to diminishing excitement surrounding the earlier launch of spot U.S. ETFs. Despite some capital inflows into altcoins, these gains were offset by Bitcoin outflows, indicating that institutional investors maintained a strong preference for the world’s largest cryptocurrency.
The debut of six spot Bitcoin and Ethereum ETFs on Hong Kong markets garnered some enthusiasm for crypto. However, the impact of these gains on crypto prices remains uncertain, given the relatively smaller scale of Hong Kong’s capital markets compared to their U.S. counterparts.
Although regional markets recently entered a bull market, with the Hang Seng index rebounding by 20% from five-year lows recorded in January, overall sentiment remains fragile, particularly in light of weak economic conditions in mainland China.
Despite regulatory challenges, Hong Kong crypto ETFs serve as the sole avenue for local and Chinese investors to gain exposure to cryptocurrencies, following China’s ban on all cryptocurrencies in 2021.
Additionally, sentiment towards cryptocurrencies was dampened by growing concerns of higher U.S. interest rates ahead of a Federal Reserve meeting this week. While the Fed is anticipated to maintain steady rates, Chair Jerome Powell could signal a hawkish stance, particularly in response to recent inflation readings surpassing expectations. Such developments have made investors cautious towards crypto, which typically thrives in speculative markets driven by low interest rates.
In the broader market, Ethereum, the second-largest token, experienced a 1.5% decline, while Solana saw a 1.2% decrease. Conversely, XRP recorded a 1.4% increase.
