Massive trading volumes seen in Bitcoin ETFs

Cryptocurrencies were in turmoil over the weekend, but trading volumes in Bitcoin ETFs reached unprecedented levels and despite widespread selling, major financial institutions appear to be selling out just yet.

Just 20 minutes after the opening bell rang on Monday, August 5, Bitcoin ETFs saw a trading volume of $1.3 billion. Later in the day, volume rose to nearly $3 billion in the first few trading hours.

The increase in volume suggests continued interest from institutional investors despite falling prices. Bitcoin (BTC) dropped below the $50,000 level early on Monday, marking a 28% drop from recent highs of $70,000.

Financial transfers

Grayscale, a major player in the crypto space, has been transferring large amounts of Bitcoin and Ethereum (ETH) to Coinbase Prime. Grayscale currently holds 2.455 million ETH worth $7.82 billion and 271,743 BTC worth $14.36 billion. These transfers may be a strategic repositioning rather than a complete exit from the market, but transfers usually mean selling.

Despite the market crash, data from Arkham shows that two of the world’s largest asset managers, BlackRock and Fidelity, have not sold their Bitcoin holdings, indicating a bullish long-term outlook for these financial giants despite short-term market volatility.

Additionally, Capula Management, Europe’s fourth-largest hedge fund, reported holdings of $500 million in Bitcoin ETF assets, suggesting a large hedge fund has made a significant investment in Bitcoin ETF assets.

This news may prompt other institutional investors to consider investing in Bitcoin, which could lead to increased market activity and a rise in the Bitcoin price.

The fall of crypto

The current crash in the cryptocurrency market is attributed to several factors: a strong correlation with falling stock markets, geopolitical tensions in the Middle East, changes in the Bank of Japan’s policy, and the US Federal Reserve’s interest rate stance.

On-chain analysts suggest that the liquidation of market maker Jump Crypto, which was marked by a 120,000 wETH sell-off, contributed to Ethereum’s decline. More than 100,000 ETH was moved from Jump Trading wallets to centralized exchanges. Other contributing factors include Mt. Gox’s payments to creditors, weak ETF dynamics, and political changes in the US

Stock market crash

At least six major trading platforms in the US have reported outages and user login issues. These include Citi, Fidelity, E-Trade, Vanguard, TD Ameritrade and Charles Schwab.

The outage came as the S&P 500 opened down 4.2% and the NASDAQ down 6.3%, reflecting market turmoil in both crypto and Wall Street.