The world’s largest cryptocurrency traded unchanged in the past 24 hours at $61,212.1 by 08:30 ET (12:30 GMT). It had fallen as far as $59,215 in overnight trade.
Selling in cryptocurrencies was driven by a storm of different regulatory factors, which, coupled with angst over U.S. interest rates, drove broader prices lower. Crypto investment products were also seen logging two straight weeks of heavy capital outflows.
Bitcoin was nursing steep losses through the past week amid reports that the German government was selling Bitcoin confiscated from a piracy website. Reports said the German police had sold about 3,000 tokens of the 50,000 initially confiscated.
Reports of the German sales were accompanied by other reports that the U.S. Commodity Futures Trading Commission was investigating market maker Jump Trading over its crypto trading activities. Jump President Kanav Kariya also said he was leaving the firm.
The reports added to a broader risk-off sentiment in crypto markets, as traders pivoted into the dollar ahead of key U.S. inflation data due this Friday. PCE price index data, which is the Federal Reserve’s preferred inflation gauge, is widely expected to offer more cues on interest rates this week.
Rising fears of high rates had battered crypto markets through the past week, and showed little signs of clearing. Strength in the dollar also diminished crypto’s appeal.
Data from digital asset manager CoinShares showed on Monday that crypto investment products saw outflows totaling about $584 million, with a bulk of these being directed towards U.S. Bitcoin exchange-traded funds.
Bitcoin products saw outflows of $630 million, while altcoin products saw mild inflows as investors saw recent price slumps as a buying opportunity.
Broader crypto prices rose on Tuesday, with major altcoins rebounding from steep losses seen over the past week.
World no.2 token Ether rose 1.6% to $3,372.49, after relinquishing a bulk of its gains made on hype over a spot Ether ETF.
ADA and SOL climbed 5% and 7%, respectively, while XRP slipped around 0.1%.
Among meme tokens, SHIB and DOGE added 3% and 4.5%, respectively.
In a Monday note to clients, analysts at brokerage firm Bernstein said Ether ETFs are expected to attract similar demand sources as their Bitcoin counterparts, though on a smaller scale.
“ETH should not see as much spot ETH conversion due to the lack of an ETH staking feature in the ETF,” analysts wrote.
They added that the basis trade, which involves buying the spot ETF and selling the futures contract simultaneously, should gain traction over time and contribute to healthy liquidity in the ETF market.
Spot Ether ETFs are nearing availability for U.S. investors following the Securities and Exchange Commission’s (SEC) approval of key regulatory filings from issuers last month.
“ETH as a primary tokenization platform is building up a strong use-case, both for stablecoin payments and tokenization of traditional assets and funds,” the analysts continued.
Ether and other digital assets require a “more improved regulatory regime,” and Bernstein anticipates that the regulatory narrative will improve closer to the U.S. elections, especially with the increasing odds of a Republican victory and Trump’s pro-crypto stance.
Despite recent declines in the crypto markets, the “structural adoption cycle remains intact,” the report noted.
Source: Cryptocurrency - investing.com
