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Bitcoin Price Collapse Amid Grayscale Outflows
Bitcoin recently experienced a significant price collapse due to continued outflows from Grayscale’s converted GBTC spot Bitcoin ETF. According to data from CoinMarketCap, the leading cryptocurrency dropped to as low as $60,800 on Tuesday, marking a 17% decline from its all-time high.
Outflows and Market Impact
- A significant outflow of $643 million occurred from the $25 billion Grayscale Bitcoin Trust (GBTC) on Monday.
- On Tuesday, there were additional net outflows totaling $326.2 million.
- Grayscale’s GBTC saw an outflow of $443 million, while ETF products from BlackRock and Fidelity recorded modest inflows.
Liquidations in the Crypto Market
Long and short traders suffered over $650 million in losses across major centralized exchanges in the past 24 hours. A total of 189,935 traders were liquidated, with long liquidations at $491 million and short liquidations at around $165 million.
Exchange Liquidation Details
- OKX had the highest share of liquidations at over $271 million, followed by Binance at $229 million and Bybit at around $104 million.
- Bitcoin-tracked futures experienced $229 million in liquidations, while Ethereum-linked futures saw over $157 million in liquidations.
Market Sentiment and Investor Behavior
The recent outflows from spot Bitcoin ETFs indicate a shift in investor sentiment and a more cautious approach. One influencing factor could be the upcoming decision by the Federal Reserve, scheduled to be revealed soon.
Grayscale Fee Reduction Plans
Grayscale intends to gradually reduce fees on its flagship product as outflows reach $12 billion. CEO Michael Sonnenshein mentioned that fee reductions for the Grayscale Bitcoin Trust ETF are expected in the coming months as the market matures.
Reasons for Outflows
Outflows from GBTC were anticipated as investors looked to capitalize on profits and arbitragers exited the fund. The insolvency of cryptocurrency giant FTX also played a role in the sell-off.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
