The world’s largest spot Bitcoin ETF lost half of its assets under management last weekend, which partly explains Bitcoin’s worst 18-month drop.
Specifically, based on data from the Arcane Research platform, The Purpose Bitcoin ETF (BTCC) recorded 24,510 Bitcoin retreated from the fund on June 17 only. This is the biggest drop in history since the fund first debuted on the Stock Exchange of Canada in April 2021.
This means that the outflow of money from the fund equates to a forced sell-off of around $500 million in BTC, adding to the selling pressure amid an already cyclical downturn in the capital market.
To describe this in more detail, Arcane Research analyst Vetle Lunde said:
The surprising point is that the above incident happened very suddenly because the community is very much looking forward to the resilience of Bitcoin when the number of BTC held by institutions reaches a record high compared to many statistics in early June 2022. Accordingly, The Purpose Bitcoin ETF is by far the largest Bitcoin-focused ETF in the world, managing nearly 48,000 BTC.
However, along with the complicated market movements caused by unpredictable variables such as the “Chain Effect” stETH – Alameda – Celsius and the collapse of the investment fund Three Arrow Capital, everything has changed rapidly. Now, The Purpose Bitcoin ETF holds only about 23,300 BTC. Additionally, another prominent Bitcoin ETF, the 3iQ CoinShares Bitcoin ETF, suffered similar losses, selling 7,401 BTC of its holdings in the last month.
As a result, BTCC has lost its lead to the ProShares Bitcoin Strategy ETF (BITO) – the first US Bitcoin ETF to be listed on the New York Stock Exchange (NYSE) even though the organization is holding it hold Bitcoin futures instead of live Bitcoin.
As of press time, BITO is managing $668 million in assets, equivalent to approximately 31,500 BTC. Recently, ProShares has also launched a “short sale” Bitcoin ETF, to “support” more investors with trading tools during the bear market.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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