Crypto sell-off: Massive trading volumes seen in Bitcoin ETFs

Crypto has been in turmoil over the weekend, but trading volumes in Bitcoin ETFs are hitting unprecedented levels, and despite widespread sell-offs, major financial institutions don’t appear to be selling — yet.

Within just 20 minutes of Monday Aug. 5th opening bell, Bitcoin ETFs experienced a trading volume of $1.3 billion. Later in the day, volume surged to nearly $3 billion in volume over the first couple of trading hours.

This surge in volume showcases sustained interest from institutional investors, despite the plummeting prices. Bitcoin (BTC) dipped below the $50,000 mark earlier Monday, signifying a 28% decline from its recent peaks of $70,000.

Financial transfers

Grayscale, a major player in the crypto space, has been transferring large amounts of Bitcoin and Ethereum (ETH) to Coinbase Prime. Currently, Grayscale holds 2.455 million ETH valued at $7.82 billion and 271,743 BTC worth $14.36 billion. These transfers could be a strategic repositioning rather than a complete exit from the market, but typically transfers mean sales.

Despite the market crash, data from Arkham shows that BlackRock and Fidelity, two of the world’s largest asset managers, are not selling their Bitcoin holdings. This indicates a long-term bullish outlook from these financial giants despite short-term market volatility.

You guys sold all your coins

… But

BlackRock
MicroStrategy
Grayscale
Fidelity

didn’t. pic.twitter.com/R2NY3rDPcQ

— Arkham (@ArkhamIntel) August 5, 2024

Furthermore, Capula Management, the fourth largest hedge fund in Europe, just reported $500 million in Bitcoin ETF holdings, which shows a significant investment by a major hedge fund in Bitcoin ETF holdings.

This news could potentially influence other institutional investors to consider investing in Bitcoin, leading to increased market activity and potentially driving up the price of Bitcoin.

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Crypto’s plunge

Crypto’s present market collapse is linked to several factors: a strong correlation with falling stock markets, geopolitical tensions in the Middle East, changes in the Bank of Japan’s policy, and the U.S. Federal Reserve’s interest rate stance.

On-chain analysts suggest that the liquidation of the market maker Jump Crypto, marked by the sale of 120,000 wETH, contributed to Ethereum’s decline. Over 100,000 ETH from Jump Trading wallets have been moved to centralized exchanges. Other contributing factors include Mt. Gox’s payments to creditors, weak ETF dynamics, and political changes in the U.S.

Stock market rout

At least six major trading platforms in the U.S. reported outages and user login issues, including Citi, Fidelity, E-Trade, Vanguard, TD Ameritrade, and Charles Schwab.

JUST IN: 🇺🇸 Over $1.93 trillion wiped out from the US stock market so far today. pic.twitter.com/LVnknYv2eB

— Watcher.Guru (@WatcherGuru) August 5, 2024

This disruption came as the S&P 500 opened 4.2% lower and the NASDAQ 6.3% lower, reflecting market turmoil in both crypto and Wall Street.

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