BlackRock is in the process of getting ready to sell off major holdings of Bitcoin (BTC) and Ethereum (ETH), and brings with it continued pull backs from institutions with regard to the firm’s crypto-related ETFs. The transfers come just before the U.S. Government is likely to face yet another shutdown.
BlackRock has also recently sent 3,402 BTC (approx. 227 million USD) and 15,108 ETH (approx. 29.5 million USD) to Coinbase. These transfers indicate an obvious liquidation of these assets. This is just the day after BlackRock’s crypto ETFs, IBIT and ETHA, experienced outflows.
Due to the volatility of the marketplaces investors are cautious, and liquidity to BlackRock’s Bitcoin ETF and Ethereum ETF has been 157.56 million and 29 million outflows, respectively. In addition to the outflows from Ethereum and Bitcoin ETFs, OUT and IN collectively report these ETFs have been negative 113 million and 410 million institutional outflows, respectively.
BTC on-chain price analytics from Glassnode have further reports of negative/out of flow BTC analytics. The analytics are highly indicative of the negative price action of BTC.The liquidation of Bitcoin positions at BlackRock is just noting the institutional sell-off that is happening in the market.
Other players involved in the market, including some government investors, like the government of Bhutan, have also shown some aversion towards Bitcoin. Following the crypto crash that happened on the 10th of October, Bhutan has, in fact, cut its behavior towards Bitcoin by almost 60%. This cutting behavior indicates the level of risk appetite that long term holders have on the market.
Standard Chartered has added to the uncertainty in the market by predicting further downside for Bitcoin. Analysts revise the end of year target to be between 100,000 and 150,000. Analysts also predict that Bitcoin will first drop to 50,000 and then will go on to 150,000, which further adds risk to the already given prediction.
This in conjunction with the foreseen partial government shutdown adds more risk to the already given predictions. A shutdown like the one foreseen has been shown to bring down the prices of cryptocurrencies. The last major drop of Bitcoin that has been seen in the market began on the 31st of January. It dropped from 80,000 to 60,000.
These combined factors will undoubtedly add to market volatility and the uncertainty that is present. Investors will also be watching for ETF withdrawals, CPI, and the recent 257 million dollar transfership to coinbase from BlackRock. The recent inflation numbers that have been shown on Wall street have been optimal. These factors will compound and present more risk to Bitcoin.
Overall, the current BTC and ETH movement, ETF outflows, and macroeconomic factors suggest a downturn in the current state of the market with increased caution. Increased caution among market participants includes a potential partial U.S. government shutdown and key economic data releases, leaving crypto investors preparing for a volatile period with continuous uncertainty surrounding the prices of Bitcoin and Ethereum.
