This trend was also reflected in broader crypto prices, continuing its gains from the prior session as the factors behind Monday’s rout- concerns over a U.S. recession, Japanese interest rate hikes and tensions in the Middle East- continued to weigh on sentiment.
Bitcoin rose 4.3% to $57,190.9 by 09:13 ET (13:13 GMT). The token had slumped as low as $49,000 on Monday before rebounding from those levels.
Gains in the world’s biggest cryptocurrency continued after it rebounded nearly 4% on Tuesday.
The token still traded below levels seen before Monday’s rout, as crypto markets also struggled with the prospect of a mass sale by the U.S. government, as well as waning interest in the crypto derivatives market.
Risk-off sentiment saw crypto derivatives, mainly exchange-traded funds- log steep outflows in the past week.
Optimism over an improved regulatory environment in the U.S. also waned as the 2024 presidential race heated up. Democratic nominee Kamala Harris was seen catching up with Republican nominee and pro-crypto candidate Donald Trump, a Bloomberg poll showed last week.
The International Monetary Fund said on Tuesday that it had made progress in talks with El Salvador over a funding program for the Central American country, but its adoption of Bitcoin still remained a point of contention, a Reuters report showed.
The IMF and El Salvador appeared to have reach “preliminary understandings” on improving the country’s economy, and had discussed policies that could be supported by the IMF.
But the fund noted that while several risks projected from the country’s adoption of Bitcoin had not yet materialized, negotiations with El Salvador will be aimed at mitigating said risks.
El Salvador adopted Bitcoin as legal tender in 2021, and had outlined sweeping plans to build infrastructure themed around the cryptocurrency. But these plans did not come to pass, as the country saw little improvement in its fiscal woes, and also found few takers for its planned “Bitcoin bonds” to fund the projects.
Broader crypto prices were a mixed bag on Wednesday, as a broader recovery in the sector lost momentum.
World no.2 token Ether climbed 0.5% to $2,457.49, while XRP added 2.9%.
ADA and SOL rose 3.8% and 10.5%, respectively.
Among meme tokens, DOGE added 5.4%, while SHIB rose 3.4%.
Ark Invest bought an additional 19,892 shares of Coinbase, valued at $3.9 million, across three of its ETFs on Tuesday. This move comes as the firm, led by Cathie Wood, rebalances its portfolios following Monday’s market downturn.
Specifically, Ark Invest purchased 13,833 shares ($2.7 million) for its Innovation ETF (ARKK), 2,743 shares ($533,000) for its Next Generation Internet ETF (ARKW), and 3,316 shares ($644,000) for its Fintech Innovation ETF (ARKF), based on the latest trade filings.
These purchases follow a significant buy of $17.8 million in Coinbase stock on Monday, marking the first purchase since June 2023 when Ark bought $21 million worth of COIN. According to Ark’s disclosures, COIN now constitutes the third-largest holding in its ARKK ETF, with an 8.7% weighting valued at $445.3 million as of August 6. In the ARKW fund, COIN is the fourth-largest holding at 6.8%, worth $84.4 million, and it is the largest holding in the ARKF fund at 9.8%, valued at $75.1 million.
On Tuesday, Coinbase shares rose 2.48% to close at $194.17. The gain is part of a recovery from a 15% drop on Monday morning, fueled by market volatility linked to U.S. recession fears and increased geopolitical tensions.
Coinbase shares rose an additional 1.3% in Wednesday’s premarket.
Source: Cryptocurrency - investing.com
