Bitcoin ETF Approval Uncertainty Triggers $55M Weekly Crypto Outflows

Cryptocurrency investment products saw a notable decline in investor interest, with a total outflow of $55 million during the week of September 13, as indicated by findings from a report by CoinShares.

Previously, the prevailing sentiment had revolved around the imminent approval of a Bitcoin exchange-traded fund (ETF) based on spot prices. However, this optimism has now begun to fade, and it’s reflected in the $42 million outflow specifically from Bitcoin.

Ethereum products also faced a downturn in demand, with outflows amounting to $9 million. Other cryptocurrencies like Polygon, Litecoin, and Polkadot collectively experienced outflows totaling $2 million, underscoring the broader market sentiment.

Contrary to this trend, Ripple’s XRP and Cardano managed to attract inflows during the same period. XRP observed an influx of $1.2 million, while Cardano garnered a more modest $100,000.

From a geographical standpoint, most regions reported net outflows. Canada led the pack with a significant $35.9 million outflow, followed by Germany and the United States with $11 million and $5.5 million respectively.

However, Switzerland and Australia defied this trend by reporting inflows. The Swiss market saw $3.5 million in inflows, while Australia reported a smaller sum of $100,000 entering the market.

According to CoinShares, the driving force behind these outflows stems from the lack of progress at the U.S. Securities and Exchange Commission (SEC) in terms of greenlighting a spot Bitcoin ETF. The report stated:

“Recent media highlighting that a decision by the US Securities & Exchange Commission in allowing a US spot-based ETF is not imminent has likely contributed to this market movement.”

Investors had been speculating on the potential approval of a spot-based Bitcoin ETF, which had fueled considerable optimism in the cryptocurrency community. In fact, some experts even positioned the approval as a potential catalyst for a significant market surge, dubbing it a “moon-worthy” event.

Research firm Fundstrat expressed a belief that Bitcoin’s value could skyrocket beyond $150,000 by the close of 2024 if the SEC indeed starts giving the green light to spot-based Bitcoin ETFs. This prediction underlines the market’s high expectations tied to regulatory decisions in the cryptocurrency sector.

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