On Tuesday, Bitcoin witnessed a decline in its price, reflecting the prevailing pessimism surrounding cryptocurrencies, accentuated by regulatory uncertainties and sustained outflows from investment vehicles, notably exchange-traded funds (ETFs).
The world’s leading cryptocurrency experienced a 1% decrease over the past 24 hours, settling at $63,558.2 by 01:52 ET (05:52 GMT).
This week, sentiment towards crypto markets took a hit following a report revealing that less than 10% of stablecoin transactions, pivotal for crypto transactions, originated from genuine users. This revelation raised doubts regarding the actual retail demand for cryptocurrencies, especially considering consistent market capital increases observed among stablecoin operators, particularly Tether.
Adding to the negative sentiment, Robinhood Markets Inc (NASDAQ: HOOD) disclosed potential regulatory scrutiny from the Securities and Exchange Commission (SEC) concerning the crypto tokens traded on its platform. Furthermore, the SEC deferred a significant decision regarding ETFs, exacerbating concerns within the crypto sphere.
These adverse developments coincided with continued outflows from crypto investment products, underscoring the prevailing negative sentiment toward the sector.
According to data from digital asset manager CoinShares, crypto investment products sustained a third consecutive week of capital outflows, totaling $435 million, with Bitcoin products witnessing outflows amounting to $423 million.
Although outflows from Grayscale’s Bitcoin ETF remained substantial, inflows into other Bitcoin ETFs notably slowed down.
The waning flows occurred amidst a lack of immediate catalysts for crypto markets, following Bitcoin’s halving event, which passed without significant market response. Additionally, the token remained rangebound post its surge to record highs in March.
In the realm of major altcoins, Ethereum experienced a 3.4% decline, dropping to $3,069.52, subsequent to the SEC postponing its decision on approving spot ETFs tracking the altcoin for U.S. markets. The regulatory body is now anticipated to announce its decision by early July, amid an ongoing investigation into Ethereum’s classification as a security, with expectations leaning towards the rejection of spot Ethereum ETF applications.
Other altcoins displayed mixed movements, influenced by speculation surrounding potential U.S. interest rate adjustments. XRP saw a modest increase of 0.3%, whereas Solana surged by 3.8%.
