With the decline in bitcoin prices have come various implications for different types of investors. Retail investors with direct exposure to the market have taken heavy losses, as have the institutional investors. The most prominent of these have been in the Canadian Bitcoin ETF, Purpose, which had recorded some of the largest losses in the space.
Canadian Bitcoin ETF Bleeds
The Purpose ETF is Canada’s largest Bitcoin ETF. It held almost 50,000 BTC prior to the market crash, making it a large player in the bitcoin ETF game. However, the market crash has not come with glad tidings for Purpose which has seen it take on some massive losses.
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By Thursday, the price of bitcoin had declined close to its previous cycle peak and had been trading just above $20,000. The sell-offs this triggered would spill into the ETFs causing the total assets under management (AuM) to plunge. The decline which started on Thursday had run up to as high as 24,545 BTC lost during this time. It translates to a 51% drop in all AuM for Purpose.
It is the largest redemption in the history of the ETF and this forced selling could have been one of the major triggers that saw the price of bitcoin decline below previous cycle peaks. It has effectively wiped out all of the inflows that were recorded at the beginning of the month into Bitcoin ETPs.Purpose ETF loses 50% of BTC | Source: Arcane Research
This has seen ETP outflows touch as high as 18,315 BTC just for the month of June alone. This translates to the worst month in the history of all bitcoin ETPs and has effectively eliminated Purpose’s position as the largest ETP provider in the space.
Buying The Dip
As large amounts of bitcoin flow out of the Canadian ETF, there have been some who have taken the opportunity to fill up their bags during this time. The ProShares’ BITO ETF has been at the forefront of this accumulation effort.BTC struggles to maintain above $20,000 | Source: BTCUSD on TradingView.com
In the last week aline, BITO has seen massive inflows that have seen its bitcoin exposure add another 4,155 BTC, leading to new all-time highs. It is not a far reach to assume that the bitcoin being picked up by the US ETF are those being removed from their Canadian counterparts. It is the second-largest weekly inflows for BITO after the launch week saw a total of 19,065 BTC.
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These trends point toward possible positive sentiment among U.S. investors. The sell-off in the market has led to declining prices but it has also brought out of the woodwork investors who see the current prices as a way to get the digital asset at a discount.Featured image from CoinDesk, charts from Arcane Research and TradingView.com
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