As a result of the decrease in bitcoin values, many categories of investors have been affected in various ways.
Both retail investors with direct market exposure and institutional investors have suffered significant losses. Purpose, a Canadian Bitcoin exchange-traded fund, has posted some of the highest losses in the sector.
The Purpose ETF is the biggest Bitcoin ETF in Canada. Prior to the market meltdown, it controlled about 50,000 BTC, making it a major participant in the bitcoin ETF market. However, the market meltdown has not been good news for Purpose, since it has sustained significant losses.
On Thursday, the price of bitcoin had fallen close to its last cycle top and was trading slightly around $20,000 per coin. Total assets under management (AuM) would plummet as a result of the ETFs’ exposure to the resulting sell-offs. During this period, the decrease that began on Thursday reached a maximum loss of 24,545.00 BTC. It represents a 51 percent decline in total AuM for Purpose.
It is the biggest redemption in the history of the ETF, and this forced selling may have been one of the primary causes for the price of bitcoin to fall below past cycle high. It has basically wiped out all of the Bitcoin ETPs inflows registered at the beginning of the month.
This has caused ETP outflows to reach an all-time high of 18,315 BTC in June alone. This was the worst month in the history of bitcoin ETPs and has basically removed Pursue’s status as the industry’s leading ETP provider.
As substantial quantities of bitcoin flow out of the Canadian ETF, some investors have seized the chance to fill their wallets. The BITO ETF from ProShares has been at the vanguard of this accumulating drive.
BITO’s bitcoin exposure has increased by 4,155 BTC in the last week due to significant inflows, resulting in new all-time highs. It is not unreasonable to suppose that the bitcoin being acquired by the US ETF are those being withdrawn from their Canadian equivalents. It is the second-largest weekly inflow for BITO, behind the debut week’s 19,065 BTC.
These data suggest that the mood of U.S. investors may be optimistic. The market sell-off has resulted in falling prices, but it has also attracted investors who perceive the present pricing as an opportunity to acquire the digital asset at a discount.
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