- A sharp decline in the cryptocurrency market on August 5 caused trading volumes for Bitcoin exchange-traded funds (Bitcoin ETF) to soar over $1 billion, which in turn sparked increased trading activity for other digital assets.
As to the statement made by Alex Thorn, the head of research at Galaxy Digital, an asset management, Bitcoin ETFs saw very high trading volumes after the market decline.
Increased Trading Volume Driven by the Bitcoin ETF
On August 5, Bitcoin ETFs had a trading volume of over $1.3 billion in just 20 minutes of trade.
According to Thorn, net inflows into these ETFs are expected as investors look to profit on an approximate 8% decline in spot Bitcoin prices since August 4.
Notably, Ethereum was the main driver of the decrease, with its price falling by more than 21% in the previous day.
The significant decline in value was ascribed to significant Ether sales by prominent investment firms, including as Jump Trading and Paradigm VC.
A report published on August 5 by QCP Group claims that Jump Trading alone has sold over $377 million worth of Ethereum and may liquidate up to $481 million overall.
But the turmoil in the market hasn’t just affected Ethereum and Bitcoin.
$528 million was pulled out of digital asset investment products last week, the first weekly drop in the previous four weeks.
There were withdrawals of $12 million and $27 million from Germany and Hong Kong, respectively.
By contrast, Canada and Switzerland recorded inflows of $17 million and $28 million, respectively, capitalizing on the price weaknesses.
Significant outflows of $400 million were recorded for Bitcoin, which marked a dramatic reversal from five weeks of inflows.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
