Against the background of the volatility of the cryptocurrency market, significant changes in the flows of funds from the largest crypto funds attracted attention. Over the past three days, $1.2 billion has been withdrawn from ETFs for bitcoin, while funds focused on Ethereum have recorded an influx of $130 million. These events indicate a possible change in investment preferences.
Bitcoin ETFs: record outflow of funds
The largest outflow of funds from bitcoin ETFs was recorded on December 19 — $680 million in one day, which was a record since their launch. In just three days, the total outflow amounted to $1.2 billion. Prior to that, there had been a steady inflow of funds for 15 days, as a result of which the total assets under management of the bitcoin ETF (AUM) increased from $100 billion to $121 billion. However, after significant sales, net assets decreased to $105 billion.
The main contributor to the outflow of funds was the Grayscale GBTC fund, which sold 1,870 BTC in three days. On the contrary, BlackRock's IBIT fund showed purchases, but their volumes were insufficient to offset the overall selling pressure. Analysts attribute the decline to profit-taking amid the recent rise in the bitcoin exchange rate, although opinions differ on the underlying structural changes.
Ethereum-ETF: inflow of funds and growing interest
Against the background of a decrease in interest in bitcoin ETFs, Ethereum ETFs showed positive dynamics. Inflows of $130 million were recorded over the same three days, including a marked increase in volumes on December 23. On this day, $226 million was withdrawn from the bitcoin ETF, which highlighted the difference in investor sentiment.
The BlackRock fund, which has accumulated more than 1 million ETH, played a key role in increasing Ethereum assets. This highlights the growing institutional interest in Ethereum as a promising asset. In addition, the price of ETH has adjusted from $4,100 to $3,100, which creates favorable conditions for the accumulation of the asset.
Investor Dan Gambardello notes that the current phase of Ethereum accumulation may be a signal for the revival of the altcoin market. The growth of institutional investments, accompanied by a relatively low asset price, can create an impetus for further market development.
What does this mean for the crypto market?
Experts see in what is happening signs of a redistribution of capital between the two largest digital assets. Bitcoin continues to hold the status of digital gold, as evidenced by its outperformance of gold ETFs in terms of assets under management in December. However, the current outflows have temporarily slowed the growth of its exchange rate.
At the same time, the growing interest in Ethereum ETFs may indicate a strengthening of altcoin positions in investors' portfolios. Institutional players such as BlackRock are actively accumulating ETH, which creates a stable base for further growth.
Conclusion
The events of recent days emphasize that the cryptocurrency market is in a phase of revaluation and asset redistribution. Bitcoin is facing profit-taking, while Ethereum is becoming an object of increased interest. Investors are closely monitoring the development of the situation to understand whether this is a temporary trend or the beginning of deeper changes. In the coming weeks, the behavior of bitcoin and Ethereum is likely to set the tone for the entire crypto market, determining its direction for 2024.
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Ethereum Supply Distribution Suggests Long-Term Bullish Signal: Santiment
Market intelligence platform Santiment suggests Ethereum’s institution-dominated supply distribution spells long-term bullish sentiments for the asset.
Supply distribution is a crucial tokenomics element for cryptocurrencies. For context, the more evenly distributed an asset is, the less impact its price will suffer from whale selloffs.
However, this reality changes when institutions enter the game. A crypto asset with more institutional adoption has long-term security and higher chances of continued uptrends.
On this front, data from Santiment has revealed a bullish supply distribution for Ethereum. The second-largest cryptocurrency by market cap has over 57% of its supply locked among institutions, a long-term bullish narrative for the altcoin king.
Ethereum Whale Holdings Hit All-Time High
In a Tuesday tweet, Santiment shared that an exclusive caliber of Ethereum whales has amassed an unprecedented amount of the asset’s supply. Per the data, wallets holding at least 100,000 ETH now command a staggering 57.35% of Ethereum’s supply.
Consequently, the balances of other Ethereum holders have depreciated considerably. The market intelligence platform pointed out that whales holding between 100 and 100,000 ETH have dropped to their lowest-ever supply control.
The whales now hold just 33.46%, losing market share to large high-caliber holders. Meanwhile, retail Ethereum wallets – addresses with less than 100 ETH – have reached a multi-year low.
The faction of Ethereum holders now commands just 9.19% of the asset’s supply, their lowest since January 2021.
Santiment Shares Market Implication
Following the disclosure, Santiment buttressed the market implications of the distribution shift. The platform noted that the increased stash among high-caliber whales is a long-term bullish signal.
Santiment acknowledged that staking platforms and decentralized finance (DeFi) protocols control a large portion of Ethereum’s supply. As a result, their continued accumulation suggests that they are locking away more of the asset.
Notably, this growing accumulation could create a shock if demand increases. Consequently, a demand shock will spur price upticks, favoring Ethereum investors.
Meanwhile, Ethereum has regained bullish momentum amidst sustained inflows from its US spot ETFs. The altcoin king has reclaimed the $4,000 price mark after an 8% weekly uptick.
At press time, Ethereum trades at $4,024 with a market cap of $484 billion.
#EthereumEFT #EthereumNews #Bitcoin #cryptocurrencies #CryptoNews