There was a significant outflow of funds from Bitcoin (BTC) and Ethereum (ETH) ETFs on Tuesday. In particular, Bitcoin ETFs saw an outflow of $242.6 million. This led to a massive decline in the values of crypto assets, reversing the positive trend recently observed in the markets. These developments come after tensions in the Middle East further escalated. Iran’s missile attacks on Israel created serious fluctuation in the crypto markets.
The “worst day” of the crypto ETF market
US-based Bitcoin ETFs had one of the worst days in their history on Tuesday. According to data provided by SoSoValue, a total outflow of $242.6 million occurred on this date. This was recorded as the biggest outflow since September 3. The value of Bitcoin dropped by approximately 6% to $60,300. This decline wiped out almost all the value it gained after the US Federal Reserve (FED) cut interest rates last month.
Increasing tensions in the Middle East negatively affected the markets. Nearly 200 ballistic missile attacks by Iran against Israel shook the atmosphere of confidence in the market. These attacks were in retaliation for Israeli operations against Hezbollah forces in Lebanon in recent weeks. Israeli Prime Minister Benjamin Netanyahu announced that they will respond strongly to these attacks. BTC failed to meet ‘Uptober’ expectations this year, in a period that has historically been known to experience its highest value increases in October. According to market data, Bitcoin has lost 2.6% of its value since the beginning of this month.
Ethereum ETFs were also affected by the situation
Not only Bitcoin but also Ethereum ETFs faced major outflows on Tuesday. There was a total outflow of $48.5 million from US-based Ethereum ETFs. This was recorded as the worst day since September 23. Fidelity Ethereum Fund (FETH), in particular, attracted attention with an outflow of over $25 million. Besides this, Grayscale Ethereum Trust (ETHE) and Bitwise Ethereum ETF (ETHW) also joined this trend with outflows of $26.6 million and $0.9 million, respectively.
However, despite this negative picture, some Ethereum ETFs showed a positive, albeit small, net flow. 21Shares Core Ethereum ETF (CETH) and VanEck Ethereum ETF (ETHV) recorded positive net inflows of $1.2 million and $2.7 million, respectively. However, the overall Ethereum ETF market remains under severe pressure. While Grayscale’s ETHE still holds the record in terms of daily outflows, Fidelity’s outflow has further increased the pressure on the ETH ETF market. Despite this, the FETH fund still remains the second largest investment fund with a total investment of $453.5 million. BlackRock’s iShares Ethereum Trust (ETHA) is the leader with a total investment of $1.14 billion.
Bitcoin and Ethereum markets are declining
The Bitcoin ETF market is following a similar trend with outflows in Ethereum. On October 1, Bitcoin ETFs saw a total outflow of $242.6 million, which was recorded as one of the largest outflows in the last month. Fidelity Wise Origin Bitcoin Fund (FBTC) led this trend with an outflow of $144.7 million, while ARK 21Shares Bitcoin ETF (ARKB) recorded an outflow of $84.3 million. Due to the tensions in the Middle East, the Bitcoin price dropped from $61,474 to $60,300 on October 1. However, as of the time of publication, the price recovered slightly and rose to $61,750.
These large outflows in Bitcoin and Ethereum ETFs once again revealed how easily crypto markets can be affected by geopolitical events. In addition to tensions in the Middle East, global economic fluctuations continue to reduce investors’ risk appetite. Despite increasing expectations, especially after the FED’s interest rate cuts, investors are still cautious. In conclusion, these large outflows in the Bitcoin and Ethereum ETF markets show how volatility of crypto assets and geopolitical risks have a huge impact on investors.
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