Key takeaways
Why are ETF investors cautious?
Investors adopted a wait-and-see approach amid overall uncertainty.
Will ETF inflows improve in the third week of October?
Most likely, especially if there is an agreement on tariffs between the US and China.
Institutional appetite for cryptocurrencies has been mixed amid the ongoing US government shutdown.
After massive inflows in the first two weeks, the third week begins with total uncertainty and deteriorating sentiment after the sudden collapse on Friday.
Cryptocurrency ETFs Navigating Uncertainty?
In the first week of the lockdown, the markets remained unfazed and became a catalyst as the “undervalue trade” became more popular.
During the period, Spot Bitcoin [BTC] ETFs It attracted a massive weekly inflows of $3.24 billion.
The immediate demand pushed Bitcoin’s price from around $113,000 to a new high of $126,000.
Source: Soso Value (BTC ETF Weekly Flows)
In the second week of the lockdown, some started taking profits from the rally, but Spot BTC ETFs attracted another massive $2.7 billion in weekly net inflows.
But the new tariff update between China and the US on October 10 hit the markets and spoiled the party.
Only $4.5 million in daily net outflows were recorded that day. But the news came after trading hours.
But the effect was absolute carnage. The liquidation chain, escalated by decoupling issues on Binance, led to panic selling that sent Bitcoin falling sharply to below $110,000 from $122,000 in minutes. This was a decline of approximately 10% for BTC.
ETH criticized weak power. It fell from $4.3 thousand to $3.3 thousand, a decrease of 20%, before settling above $3.7 thousand on the Binance exchange.
ETH ETF inflows are slowing
In the first half of October, US ETH ETF investors bought more than $1.7 billion, but amid the overall uncertainty and series of liquidations, they sold nearly half a billion ($428 million in weekly outflows in the third week).
Source: Soso value
Although the United States has softened its stance towards China and strengthened the market slightly,… probability The rate of reaching a deal by early November dropped from 84% to 77%, putting Bitcoin’s price below $115,000.
According to the Cryptocurrency Trading Bureau QCB CapitalBeijing’s reaction could determine investors’ next move.
Meanwhile, the US government shutdown could extend into late October or early November, according to the forecasting site Polymarket.
Although the market expected After another 25 basis point rate cut in the Fed’s next decision in late October, a delay in macro prints due to the lockdown could add to volatility.
However, traders’ confidence could be boosted if BTC recovers $115,000, which has doubled as a short-term cost base and crucial level for previous recoveries.
Source: Cryptoquant
Another relief for investors was that “Trump whale‘He has closed His $500 million short position in Bitcoin, further confirming that overall uncertainty on the tariff front could diminish.
