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Bitcoin fund witness BTC reserves drop by 50%

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Redakcja
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4 min reading

On-chain data shows two huge declines in the Bitcoin reserves held by a Canadian Bitcoin fund but there’s a bright side to this. A Canada based Bitcoin Fund (QBTC:CN), the closed-end investment product, it was around 24,000 BTC in its vault in early June.

On-chain data shows two huge declines in the Bitcoin reserves held by a Canadian Bitcoin fund but there’s a bright side to this. A Canada based Bitcoin Fund (QBTC:CN), the closed-end investment product, it was around 24,000 BTC in its vault in early June. Nevertheless, as the monthly session went ahead, the reserves first went down to 16,000 BTC in a hysterical way yet straight-line decline. 

After the huge withdrawal was pushed the Bitcoin’s funds BTC reserves were around 13,000 BTC, based on the on-chain data from South-Korea based analytics firm CryptoQuant. Nevertheless, the withdrawals from the QBTC fund across June clashed with an inflow spike in 3iQ’s exchange-traded fund (ETF), also known as 3iQ CoinShares Bitcoin ETF (BICQ). So basically, the Canadian ETF attracted some inflows of 2,088 BTC in June 2021 against the QBTC outflows of 10,432 BTC in the similar month. Charlie Moss, ByteTree CEO, said that 3iQ CoinShares Bitcoin ETF. He said that the growth of crypto ETF’s around crucial stock exchanges which allows redemptions and withdrawals coerced investors to reduce their exposure in this closed-ended fund.

Generally, 3iQ’s main rival, the New-York based Grayscale Bitcoin Trust (GBTC), did not see any shortages in its BTC reserves. Grayscale investments has closed GBTC since February, naming it as “administrative purposes”. The closed-end fund doesn’t allow redemptions and withdrawals. Also, data that was collected by ByteTree asset management shows that the 90-day inflow into the United States and Canada-based Bitcoin funds has decreased on to 12,794 BTC in contrast to 191,846 BTC in January 2021, a 93.3% decline. The 3iQ CoinShares Bitcoin ETF (BTCQ), Even after alluring 2,088 BTC in June 2021, there has been 354 BTC outflows in July 2021. 

Fund reserves shows increasing and decreasing institutional interest in Bitcoin. Which is mainly due to these investment products focus on working to give accredited investors ways to gain indirect exposure to crypto markets by issuing shares backed by original Bitcoin sitting in vaults. Therefore, as Bitcoin reserves on average drop around the funds, it basically points out a suggestion for lower demand cryptocurrencies among institutional investors. 

Institutional investors have tried to deduct their exposure in the Bitcoin funds in connection with the Federal Reserve’s warlike signals at the end of June’s Federal Open Market Committee’s meeting. During the U.S Central bank said mid-June that it could increase market interest rates by the end of 2023 to preserve prevailing inflationary pressures. It is meant to the US consumer price index (CPI), a tool to measure inflation, which increased up to 0.6% in May 2021 to reach a three-decade high of 4.5%; CPI increased another 0.9% in June to reach 5.45% at its fastest speed during the last 13 years. Even after the Fed’s outlook Bitcoin has drastically decreased to $32,000. Nonetheless, the flagship cryptocurrency has mostly remained inside the $30,000-$34,000 price range, pointing out further a mixed outlook among retail and institutional investors about the cryptocurrency’s next directional bias. 

This bias conflict is born even after the inclusion of the famous narrative that showcases Bitcoin as an ultimate edge against an increasing consumer price. The record was focused on like even if there is U.S dollar or flat currencies, Bitcoin will emerge with a limited supply of 21 million tokens, which turns it short in supply than inflationary currencies, and in turn more valuable in the long run. But Bitcoin has been pessimistic during the several past months, forcing critics to question its safe-haven narrative for the short-term at least, fortune talked about a special area on Bitcoin’s unpredictable response on increasing consumer prices, mentioning that cryptocurrency Is now walking towards “to its own drummer.” 

According to Eric Dalton, president and managing director of the Wealth Alliance, stated that Bitcoin had turned in to an overvalued asset after rising from below $4,000 to a record $65,000 in almost a year. Traders are now closely watching that last major unlock dates over the next few days and weeks due to their potential effect on the cryptocurrency market. 

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