In the dynamic world of cryptocurrency, Bitcoin (BTC) has recently faced a significant downturn, with its value decreasing by over 5.5% in the past week, culminating in a six-week nadir of $58,400 on June 25. This decline has seen Bitcoin’s value drop beneath its immediate cost basis, signaling potential for further downturns, as reported by the analytics firm Glassnode.
Glassnode’s latest “Week On-chain” newsletter, released on June 25, indicates that since mid-June, Bitcoin’s market price has fallen below the acquisition cost for both short-term holders (1 week to 1 month at $68.5k) and medium-term holders (1 to 3 months at $66.4k).
Visualization of Bitcoin’s realized price by investor cohort. Courtesy of Glassnode.
The cost basis for short-term Bitcoin holders, also known as the realized price, is a key indicator that tracks the average purchase price of BTC for those whose investment horizon is typically less than 155 days. LookIntoBitcoin’s data highlighted that on June 23, when Bitcoin’s price slipped under the $64,000 mark, it also fell beneath the short-term holders’ realized price of $64,591 at that time.
Chart depicting the realized price for Bitcoin’s short-term holders. Source: LookIntoBitcoin.
Moreover, the recent price drop was perilously close to undercutting the cost basis of holders within the 3 to 6-month bracket, which stands at $57,300 and continues to climb despite the falling market price.
The analysis also pointed out a concerning trend: the cost basis for the 1 week to 1 month holders has dipped below that of the 1 to 3-month holders, indicating a waning demand and a net capital withdrawal from Bitcoin.
Graph showing Bitcoin’s capital flow among short-term holders. Source: Glassnode.
In a contrasting development, spot Bitcoin ETFs in the United States have experienced a surge in capital inflows. On June 25, ten US-based spot Bitcoin ETFs collectively saw modest inflows amounting to $31 million, breaking a consecutive seven-day pattern of capital outflows.
According to SoSo Value’s data, Fidelity’s ETF FBTC led the charge with $49 million in net inflows, followed by Bitwise’s Bitcoin ETF BITB with $15 million, and VanEck’s Bitcoin Trust ETF HODL with $4 million in third place.
Summary of total net inflows for Bitcoin spot ETFs. Provided by SoSo Value.
Conversely, Grayscale’s ETF GBTC experienced a notable outflow of $30.2 million in a single day, while ARK 21Shares’ Bitcoin ETF saw $6 million in net outflows.
As of June 25, the ten spot Bitcoin funds, which commenced trading on January 11, have amassed net inflows totaling $14.42 billion, with their assets under management exceeding $53.56 billion.
The recent exodus from spot Bitcoin ETFs is the most substantial since April, marked by a staggering $1.2 billion in net outflows between April 24 and early May.
Please note, this article is for informational purposes only and does not constitute investment advice or recommendations. Every investment and trade carries inherent risk, and individuals should perform their own due diligence before making financial decisions.