Bitcoin Losing $60K Handle May Trigger Wave of ETF Liquidations: Analyst
The $60,000 level for Bitcoin could prove significant as it is estimated to be the average entry price for Bitcoin ETFs. Since their debut on January 11, the 11 U.S. spot Bitcoin ETFs have accumulated over $14 billion in net inflows. According to Markus Thielen, founder of 10x Research, 30% of these flows are part of a non-directional arbitrage strategy called the basis trade. Bitcoin's drop below $60,000 in late April was halted around $56,500 after BlackRock announced that heavyweight institutions were likely to trade in the spot ETFs. However, JPMorgan revealed that 80% of the inflows into the spot ETFs came from existing crypto market participants. Bitcoin has fallen nearly 14% in four weeks due to faster sales by miners and old wallets, Germany's divestment of crypto holdings, and fears that reimbursement by defunct exchange Mt. Gox will trigger a wave of selling. Bitcoin is currently trading at $60,200, down 4% over the past 24 hours.
