Cryptocurrencies and related stocks pared losses Tuesday as bitcoin rebounded slightly after sliding to June lows.
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Bitcoin on Tuesday afternoon rebounded to $67,300 following its morning drop as low as $66,177. The early slide marked bitcoin’s first fall below $67,000 in June and its lowest level since mid-May, according to CoinDesk Indexes data. Still, bitcoin was down more than 3% over the last 24 hours from its overnight high of $69,711. Other cryptocurrency prices dropped to follow the decline.
“There is no discernable event which is driving this drop,” said Steven Lubka, head of private clients at financial services firm Swan Bitcoin. He noted that Tuesday’s drop is likely “just the result of short term trader positioning.”
Ethereum fell below $3,500 late Tuesday, carving 4.6% lower over the last 24 hours.
Cryptocurrency miners flipped positive Tuesday after suffering the hardest hits in early trade. Marathon Digital (MARA) rebounded to a 1.9% gain after tumbling 5.5% Tuesday morning. Riot Platforms (RIOT) rose nearly 1% following its 6% dive in early trade. CleanSpark (CLSK) reversed up 1.6% Tuesday after shares tumbled nearly 7% in the morning.
Spot bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT) and ARK’s 21Shares Bitcoin ETF (ARKB), collectively faltered nearly 3% Tuesday.
ETF Inflow Streak Ends
The spot BTC ETFs on Monday recorded $64.9 million in outflows to end a 19-day streak of inflows, according to data from Farside Investors. The Grayscale Bitcoin Trust (GBTC) and Invesco Galaxy Bitcoin ETF (BTCO) led the outflows at $39.5 million and $20 million, respectively. BlackRock’s ETF and the Bitwise Bitcoin ETF (BITB) were the only ETFs that recorded inflows Monday.
However, that inflow streak did not translate to price gains for BTC.
“While the spot bitcoin ETFs have taken in large inflows the past few weeks, some market participants have felt the price gains have been muted,” Lubka said. “Some of these inflows were due to participants arbitraging the premium of the CME futures market, by shorting futures and buying the ETF.” However, the arbitrage trades were unlikely to account for a large portion of the inflows, Lubka added.
“The simple answer is merely that the bitcoin market is a very large market, one whose short-term fluctuations are dominated by the leveraged traders pushing billions in volume per day,” Lubka said. “Spot ETFs, while a welcome entrant, are far from the largest players in the bitcoin market.”
Overall, the spot bitcoin ETFs have recorded $15.62 billion in inflows since their Jan. 11 launch. BlackRock has led the gains, with $17.6 billion in inflows. Grayscale has lagged, recording $17.97 billion in outflows since converting to a spot bitcoin ETF.
Crypto Stocks, Bitcoin Price
Elsewhere, crypto exchange Coinbase (COIN) pared losses to 2.3% Tuesday. COIN stock is trading in a cup base with a 283.48 buy point. Shares could be working on a handle.
Despite Tuesday’s decline, bitcoin’s price has rallied 60% so far this year. The world’s top cryptocurrency hit a record high $73,798 on March 14.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
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