Bitcoin Bounces Back Above $67,000 Following Fed’s Dovish Commentary
The world’s largest cryptocurrency, Bitcoin (BTC), has experienced a strong bounceback above $67,000 after the Federal Reserve’s dovish commentary on Wednesday. The price of Bitcoin is currently up 8.8%, trading at $66,787.80 with a market cap of $1.314 trillion.
Bitcoin ETFs See Net Outflows For Third Day
Data from Farside investors reveals that Bitcoin ETFs registered net outflows for the third consecutive day on March 20. The net outflows on that day amounted to $261 million, bringing the total accumulated net outflows over the past three days to $742 million. On March 18, there was a net outflow of $154.3 million, followed by a larger outflow of $326.2 million on March 19.
One notable event on Wednesday was the Grayscale Bitcoin Trust (GBTC) experiencing a single-day net outflow of $386 million, contributing to its total historical net outflow of $13.27 billion. On the other hand, the BlackRock Bitcoin ETF IBIT witnessed a single-day net inflow of $49.28 million, pushing its total historical net inflow to $13.09 billion. However, inflows in Bitcoin ETFs have significantly decreased this week due to concerns about the central bank’s actions.
BTC ETFs In ‘Dumb Money’
Prominent Bitcoin maximalist Max Keiser commented that investors in Bitcoin ETFs are often considered as ‘dumb money.’ These investors tend to buy and sell Bitcoin ETFs without achieving significant gains and mostly experiencing losses. While this generates commissions for brokers, these investors struggle to navigate the volatility of Bitcoin effectively, potentially leading to financial setbacks.
Keiser’s tweet:
“ETF buyers are the quintessential ‘dumb money’ who will buy and sell the Bitcoin ETFs and realize no gains (and mostly losses) but will generate lots of commissions for brokers. They can’t surf Bitcoin’s volatility, and they’ll drown.”
– Max Keiser
Net Decrease in Non-Zero Coin Wallets on Bitcoin Network
On-chain data provider Santiment reported a net decrease of -311,000 total non-zero coin wallets on the Bitcoin network in the last 10 days. While this may concern novice traders, historically, this trend has been associated with moments of fear, uncertainty, and doubt (FUD) in the market.
This suggests that small Bitcoin wallets tend to capitulate and sell their coins during these times, while larger wallets take advantage of the opportunity to accumulate more.
Santiment’s tweet:
“Over the past 10 days, a net difference of -311K total non-0 coin wallets have dropped off of the Bitcoin network. To a novice trader, this may appear to be a concern with less overall active participants. However, historically this stat has reflected FUD moments.”
– Santiment
Hot Take: Bitcoin Bounces Back After Fed’s Dovish Commentary
Bitcoin has shown resilience by bouncing back above $67,000 following the Federal Reserve’s dovish commentary. Despite concerns about net outflows from Bitcoin ETFs and a decrease in non-zero coin wallets on the Bitcoin network, the cryptocurrency continues to attract investors.
While some consider Bitcoin ETF investors as ‘dumb money,’ it is important to note that the market is volatile and requires careful navigation. As Bitcoin’s price fluctuates, it presents opportunities for both gains and losses.
It will be interesting to see how Bitcoin performs in the coming days as it continues to capture the attention of both institutional and retail investors.
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