The drop in bitcoin prices has had various implications for different types of investors. Retail investors directly exposed to the market suffered heavy losses, as did institutional investors. The biggest of these was in the Canadian Bitcoin ETF, Purpose, which had suffered some of the biggest losses in the space.
Canadian Bitcoin ETF Bleeding
The Purpose ETF is the largest Bitcoin ETF in Canada. He held almost 50,000 BTC before the stock market crash, making him a big player in the bitcoin ETF game. However, the stock market crash was not good news for Purpose, which saw it suffer massive losses.
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On Thursday, the price of bitcoin had fallen near its previous cycle peak and was trading just above $20,000. Triggered sales would trickle down to ETFs, leading to a fall in total assets under management (AuM). The drop that started on Thursday had reached 24,545 BTC lost during this period. This translates to a 51% drop in all AuM for Purpose.
This is the biggest buyback in ETF history and this forced sell-off could have been one of the main triggers that saw the price of bitcoin drop below the previous cycle’s peaks. It effectively wiped out all the inflows that were seen earlier this month in Bitcoin ETPs.
Purpose ETF loses 50% of BTC | Source: Arcane Research
This saw ETP outflows reach 18,315 BTC for the month of June alone. This results in the worst month in history for any Bitcoin ETP and effectively eliminated Purpose’s position as the largest ETP provider in the space.
Buy the dip
As large amounts of bitcoin flow out of the Canadian ETF, some have taken the opportunity to fill their bags during this time. ProShares’ BITO ETF has been at the forefront of this accumulation effort.
BTC struggles to maintain above $20,000 | Source: BTCUSD on TradingView.com
Over the past week, BITO has seen massive inflows which saw its bitcoin exposure add another 4,155 BTC, leading to new all-time highs. It is no exaggeration to assume that the bitcoins recovered by the American ETF are those that are withdrawn from their Canadian counterparts. This is the second largest weekly inflow for BITO after the launch week saw a total of 19,065 BTC.
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These trends point to possible positive sentiment among US investors. The market sell-off led to lower prices, but it also knocked investors out of the carpentry who see current prices as a way to get the digital asset at a discount.
Featured image from CoinDesk, charts from Arcane Research and TradingView.com
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