On Tuesday, the price of Bitcoin exhibited minimal movement, hovering within the lower range of a trading band established over the past month, as investors continued to withdraw from U.S.-listed cryptocurrency investment products.
The introduction of spot exchange-traded funds (ETFs) in Hong Kong failed to evoke significant excitement, with market participants awaiting confirmation of Asian demand for crypto assets. Notably, Hong Kong’s capital markets are considerably smaller compared to those in the United States.
As of 01:26 ET (05:26 GMT), Bitcoin experienced a modest 1.6% increase over the previous 24 hours, reaching $63,423.3.
Bitcoin ETFs Witness Persistent Outflows
Data from CoinShares, a digital assets manager, revealed on Monday that crypto investment products sustained a third consecutive week of capital outflows, amounting to $345 million, marking the largest outflow since March.
Bitcoin observed a notable net outflow of $423 million, attributed to diminishing excitement surrounding spot U.S. ETFs launched earlier this year. While some altcoins witnessed capital inflows, these were largely offset by Bitcoin outflows. Institutional investors have maintained a predominant preference for the world’s largest cryptocurrency, especially following the ETF launch earlier this year.
Hong Kong Spot Bitcoin and Ether ETFs Debut with Modest Enthusiasm
Six spot Bitcoin and Ethereum ETFs debuted on Hong Kong markets on Tuesday, registering some level of enthusiasm for cryptocurrencies. However, the extent to which these gains would impact crypto prices remained uncertain, given the relatively smaller scale of Hong Kong’s capital markets compared to their U.S. counterparts.
Although regional markets recently entered a bull market, with the Hang Seng index rebounding 20% from five-year lows recorded in January, overall sentiment remained delicate, particularly in light of weak economic conditions on the mainland.
Nevertheless, the Hong Kong crypto ETFs represent the primary avenue for local and Chinese investors to gain exposure to cryptocurrencies, following China’s blanket ban on all crypto assets in 2021.
Cryptocurrency Prices Show Limited Movement amid Growing Fed Fears
Sentiment towards cryptocurrencies was dampened by mounting concerns about potentially prolonged high U.S. interest rates, ahead of an upcoming Federal Reserve meeting.
While the Fed is widely anticipated to maintain rates at current levels, Chair Jerome Powell could signal a hawkish stance, particularly in response to several inflation readings surpassing expectations.
This cautious sentiment towards crypto assets arises from the sector’s historical reliance on low interest rates to fuel speculative markets.
Among other major tokens, Ethereum, the second-largest cryptocurrency by market capitalization, declined by 1.5%, while Solana experienced a 1.2% decrease. XRP saw a modest increase of 1.4%.