The price of Bitcoin faced downward pressure on Tuesday, reflecting ongoing regulatory uncertainties and persistent outflows from investment products, particularly exchange-traded funds (ETFs).
Over the past 24 hours, the world’s largest cryptocurrency experienced a 1% decline, settling at $63,558.2 by 01:52 ET (05:52 GMT).
Crypto markets encountered negative sentiment this week following a report revealing that less than 10% of stablecoin transactions, essential for crypto transactions, were organic or from genuine users. This raised doubts about the actual retail demand for cryptocurrencies, especially with stablecoin operators like Tether consistently witnessing market capital increases.
Furthermore, trading platform Robinhood Markets Inc (NASDAQ:HOOD) disclosed potential regulatory scrutiny from the Securities and Exchange Commission (SEC) concerning crypto tokens traded on its platform. The SEC also delayed a crucial decision on ETFs.
Amid these setbacks, crypto investment products sustained outflows for the third consecutive week, underscoring prevailing negative sentiment toward the crypto space.
According to data from CoinShares, overall outflows from crypto investment products reached $435 million, with Bitcoin products witnessing outflows of $423 million. Although Grayscale’s Bitcoin ETF accounted for a significant portion of the outflows, capital inflows into other Bitcoin ETFs slowed considerably.
The declining flows coincided with a lack of immediate catalysts for crypto markets, following Bitcoin’s halving event, which passed without significant impact. Additionally, the token remained within a narrow range after its record highs in March.
In the altcoin market, Ethereum experienced a 3.4% decline, dropping to $3,069.52, following the SEC’s decision to postpone the approval of spot ETFs tracking the altcoin for U.S. markets. The regulator is now expected to announce its decision by early July and is conducting an investigation into whether Ethereum qualifies as a security, potentially affecting spot Ethereum ETF applications.
Other altcoins witnessed mixed movements, with XRP recording a 0.3% increase, while Solana saw a 3.8% rise, amidst ongoing speculation regarding U.S. interest rate adjustments.