A Canada-based Bitcoin fund operated by 3iQ Corp. has been operating, has seen a significant decline in BTC reserves since June.

Bitcoin Fund (QBTC) is a closed-loop investment product that held around 24,000 BTC in early June. However, as the monthly trading session progressed, the initial reserve fell well below 16,000 BTC.

Then another big drop pushed the Bitcoin fund’s BTC reserve to around 13,000 BTC, according to on-chain data from South Korean analytics firm CryptoQuant.

QBTC vs. Bitcoin reserves on GBTC (red) vs. Bitcoin price (black) | Source: CryptoQuant

However, the June withdrawal from the Bitcoin Fund coincided with the inflow of 3iQ’s ETF, known as the 3iQ CoinShares Bitcoin ETF. Specifically, the Canada ETF pulled in an inflow of 2,088 BTC in June 2021, compared to an outflow of 10,432 BTC from the Bitcoin fund in the same month.

Charlie Morris, CIO of ByteTree, noted that 3iQ is allowing its customers to convert their Bitcoin Fund shares into a 3iQ CoinShares Bitcoin ETF. He added that the proliferation of crypto ETFs on the major exchanges – which allow exchanges and withdrawals – has led investors to reduce their exposure to the closed-end fund.

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– Is a collective investment model based on the issue of a fixed number of units that cannot be redeemed by the fund. In contrast to open-ended funds, new shares in closed-end funds are not created by managers to meet investor demand.

Less bitcoin exposure By comparison, 3iQ’s biggest competitor, New York-based Grayscale Bitcoin Trust (GBTC), has seen no decline in its BTC reserves. Grayscale Investments closed GBTC in February for “administrative reasons”. Closed funds do not allow exchanges or withdrawals In addition, data is collected by ByteTree Asset Management

Inflows into Bitcoin funds based in the US and Canada have decreased from 191,846 BTC in January 2021 to 12,794 BTC over 90 days, a decrease of 93.3%. Canada’s largest bitcoin fund’s BTC reserve drops 50% in more than a month, will this affect the market? Bitcoin Funds BTC saw reserves drop 93.3%

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Source: ByteTree

Reserves from funds that reflect institutional interest in Bitcoin are bullish or bearish. This is mainly because these investment products tend to give accredited investors indirect access to the crypto market by issuing stocks that are backed by Bitcoin. Canada’s largest bitcoin fund’s BTC reserve drops 50% in more than a month, will this affect the market? Closed-end funds trading at a negative premium did not see any major inflows / outflows in July

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Source: ByteTree When BTC reserves on funds decline, it usually indicates lower demand for the cryptocurrency from institutional investors.

A hit

from the Fed

In mid-June in particular, the Fed announced that it would hike rates by the end of 2023 in order to contain prevailing inflationary pressures. They relate to the U.S. consumer price index (CPI), a measure of inflation that rose 0.6% in May 2021 to a three-decade high of 4.5%. The consumer price index rose 0.9% in June and reached 5.4%, the fastest pace in 13 years. Canada’s largest bitcoin fund’s BTC reserve drops 50% in more than a month, will this affect the market? The index for all commodities such as food and energy rose 0.9% in June after rising 0.7% in May.

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Source: US Bureau of Labor Statistics

Bitcoin has fallen below $ 32,000 since the Fed’s outlook forecast. However, the cryptocurrency remains largely in the $ 30,000- $ 35,000 price range, showing a split between retail and institutional investors as to where BTC is headed next.

But Bitcoin has reacted in contrast to rising inflation in the past few months, which has led critics to question its safe haven narrative, at least for a short time. For example, Fortune Magazine has a dedicated section on Bitcoin’s erratic response to rising consumer prices. Canada’s largest bitcoin fund’s BTC reserve drops 50% in more than a month, will this affect the market? Bitcoin has fallen more than 50% since its all-time high in mid-April

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Source: TradingView

Eric Diton, President and CEO of The Wealth Alliance, noted that Bitcoin has become an overvalued asset after climbing from under $ 4,000 to a record $ 65,000 for almost a year. However, based on historical data, the price must be corrected before it continues to rise. However, a Bank of America survey of fund managers also showed that “Bitcoin Long” was one of the most popular, along with “Long ESG” and “Commodity Long”. How

Bitcoin magazine

As Cointelegraph reported, traders are now closely monitoring the unlock date of the Grayscale Bitcoin Trust to see the impact on the crypto market.

July 17th will be one of the days with the largest unlock volume in this unlock, with 16,240 bitcoins worth GBTC available for trading, a total of 5% of Grayscale’s 650,000 bitcoins will be unlocked in July.

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