Cryptocurrency markets appear calm heading into the weekend after a volatile week that tested how new institutional investors in cryptocurrency trading react to huge swings that have become old hat to more experienced crypto investors.
The selloff in Bitcoin and Ether began earlier this week, wiping out $367 billion in value as markets in Japan headed for a steep decline. But it turns out these new crypto traders were willing to buy crypto when prices fell.
Ethereum exchange-traded funds have seen net inflows of about $120 million this week, with most traders buying on Monday and Tuesday when the world’s second-largest cryptocurrency fell 42% from its March high of more than $4,000.
Although net inflows to spot bitcoin ETFs have been negative since Monday, data from crypto analytics firm CoinGlass shows that demand began to accelerate again mid-week, with spot fund inflows adding more than $245 million on Wednesday and Thursday.
Bitcoin and Ethereum, 1 month
Hundreds of millions of dollars began flowing into bitcoin ETFs on the same day Morgan Stanley gave its 15,000 financial advisers the green light to start offering clients with a net worth of more than $1.5 million in trades on the funds. Black Rock And sincerity.
The bank, one of the world’s largest wealth managers, is the first among Wall Street’s big players to take this step. Until now, wealth managers had only facilitated deals if clients specifically requested exposure to these new cryptocurrency funds.
Of Morgan Stanley’s $1.5 trillion in assets under management, the bank disclosed in a May 13 filing that it holds about $270 million in spot bitcoin exchange-traded funds. The next filing deadline on Wednesday will provide the latest reading of how much exposure banks and hedge funds now have to these spot crypto products.
Other investors and asset managers, who have been on the sidelines doing internal due diligence on crypto ETFs, are expected to feel pressure to follow Morgan Stanley’s lead soon.
The Ether Spot ETFs, which launched less than three weeks ago, have seen relatively tepid inflows compared to the massive launch of Bitcoin Spot ETFs in January. The Bitcoin ETFs collectively have $54.30 billion in assets under management, compared to $7.25 billion across Ether Spot ETFs.
Moving in tandem with US stocks
The cryptocurrency market has been trading in tandem with US stocks for most of the week.
The market cap of all tokens has regained hundreds of billions of dollars since Monday and is now above $2.1 trillion.
Bitcoin hit an intraday high of around $63,000 on Friday, and ether was trading above $2,700 earlier.
Over $100 million in short bets on Bitcoin have been liquidated in the past 24 hours, helping to support Bitcoin’s gains.
Although Bitcoin and Ethereum are well above their Monday lows, both assets are still down over the past seven days, with Ethereum heading for its worst week in nearly two years.
The same story applies to some cryptocurrency-related stocks. Coinbase, Microstrategy And Bitcoin Miner Riot platforms Stocks posted their third straight weekly loss.
Cryptocurrency price action this week has revealed how digital assets continue to track U.S. stocks and how they tend to respond to the same macro catalysts.
Earlier this week, a yen sell-off contributed to the turmoil that roiled global markets, and then on Thursday, new data on jobless claims came in lower than expected, helping to calm recession fears. The S&P 500 posted its best day in nearly two years on Thursday, and the cryptocurrency market rebounded.
It is also useful to see that the regulatory winds appear to be shifting.
However, another US judge has sided with the cryptocurrency industry in a legal battle against the US Securities and Exchange Commission.
U.S. District Judge Analisa Torres ordered Ripple to pay $125 million in civil penalties, far less than the $2 billion the SEC was seeking. Ripple’s XRP rose 22% on Thursday after the news.
