As a seasoned crypto investor with a keen eye for market trends and a knack for predicting the next big move, I’ve been closely watching the upcoming Federal Reserve meeting. Given my past experiences, I know that such events can significantly impact the crypto market, especially given its relatively short history and susceptibility to news and developments.
On September 18 and 19, the U.S. Federal Reserve is scheduled to convene for a meeting. During this gathering, they will consider whether to imitate actions taken by other central banks, like the European Central Bank, and potentially lower their main interest rates following several years of increases.
This unique occurrence has a significant impact on all financial markets, but notably so for cryptocurrencies due to their brief history and sensitivity to similar news events. It’s fascinating to observe the strategies US investors have adopted in advance, specifically focusing on Exchange-Traded Fund (ETF) investments in Bitcoin and Ethereum.
Bitcoin Buying
Since their launch in mid-January of this year, the 11 Bitcoin ETFs have been reflecting the overall sentiment of US investors regarding Bitcoin. Their trading activities have also influenced the price fluctuations of the digital asset, with extended buying periods causing surges and prolonged selling leading to downturns.
The behavior of these entities is significantly impacted by economic news and the general health of their local market. For instance, they engaged in a temporary purchasing frenzy on August 23 and 26 (Fridays and Mondays), following Jerome Powell’s announcement that the U.S. central bank was considering reducing interest rates in the near future.
Over the past few weeks, their actions shifted due to economic uncertainties, but lately, they’ve been stockpiling once more. As per FarSide data, the total net inflows into all US spot Bitcoin ETFs skyrocketed to $186.8 million on Tuesday, marking the day before the FOMC meeting as a significant one for these investments.
Over the past four trading days, the value of positive numbers in BTC ETF portfolios held by U.S.-based investors has significantly increased. On Monday, it was approximately $12.8 million, but surged to an impressive $263.2 million on Friday, and further rose to $39 million last Thursday. This growth adds up to a total of over $500 million in just four days.
What About ETH?
It appears that Ethereum ETFs have struggled to generate substantial investor demand and curiosity, a point that has been raised before. This trend hasn’t shown significant shift this week, with total withdrawals amounting to $9.4 million on Monday and $15.1 million the day after.
In simpler terms, even though there was a possibility of interest rates decreasing by the Fed (which is typically good for riskier assets), this did not manage to alter investors’ viewpoints regarding Ethereum ETFs.
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2024-09-18 13:32