Introduction
Against the backdrop of recent volatility in the cryptocurrency market, the spot ETFs of Bit and ETH have continued to attract a large influx of funds, highlighting investors' strong interest and confidence in digital assets. This trend not only reinforces the core position of Bit and ETH in the global financial system, but also paves the way for digital assets to gradually enter the mainstream financial market. With the continued participation of institutional investors, cryptocurrencies are gradually becoming a key tool for hedging inflation and wealth management.
Specifically, on December 18, 2023, the spot ETFs of Bit and ETH attracted inflows of $275 million and $2.45 million respectively, demonstrating the market's strong recognition of these digital assets. The sustained growth of the Bit ETF is mainly driven by institutional investors, while the ETH ETF is steadily attracting funds thanks to its widespread application in the DeFi field. Although the cryptocurrency market still faces short-term volatility, especially influenced by macroeconomic changes, the growth trend of these inflows indicates that the appeal of digital assets as long-term investments is becoming increasingly evident.
Latest price and trend of Bit & ETH
Continuous Inflows into Bit Spot ETF
As of December 18, the Bit spot ETF continued to perform strongly, with a single-day inflow of $275 million, marking the 15th consecutive day of inflows. This growth is mainly driven by institutional investors, with BlackRock's IBIT ETF playing a key role in the process. As more and more institutional investors seek ways to hedge against inflation, the demand for Bit as a digital asset is increasing, and the inflows are expected to further enhance Bit's position in the global financial market.
The inflows into the Bit ETF reflect the growing interest and confidence of investors in this cryptocurrency, especially in its relatively volatile market environment. As the adoption of the Bit ETF continues to expand, it is expected that more funds will flow into the market, further driving the growth of Bit.
ETH Spot ETF Also Attracts Inflows
Similar to the Bit spot ETF, the ETH spot ETF has also seen positive inflows. On December 18, the net inflow of the ETH spot ETF was $2.45 million, indicating that investors' confidence in ETH remains strong. Specifically, BlackRock's ETHA ETF has become the main driver of inflows into the ETH spot ETF, attracting around $81.9 million in funds so far.
ETH's strong performance is closely related to its applications on DeFi platforms. As the ETH blockchain continues to be upgraded, its potential as a multi-functional asset is increasingly recognized, and it is expected that the inflows into the ETH ETF will continue to grow, further consolidating ETH's important position in the digital asset market.
Short-term Impact of Market Volatility on Cryptocurrency Prices
Despite the strong inflows into the Bit and ETH spot ETFs, the cryptocurrency market still faces short-term volatility. On the morning of December 19, the price of Bit briefly fell to $98,802, triggering a violent fluctuation in the entire contract market, with the liquidation amount reaching $197 million within an hour. According to the latest 24-hour data from Coinglass, the current long position liquidation amount has reached $660 million, while the short position liquidation amount is $123 million.
A key factor in the market volatility is the expectation that the Fed may slow the pace of rate hikes next year, which has triggered a widespread market reaction. Additionally, the 918,800 CRV position of Curve Finance founder Michael Egorov was liquidated during the price fluctuations, with a liquidation value of around $882,000. These events have caused the ETH Gas fee to spike to 33 Gwei, with the cost of executing Swap operations reaching $45.
However, with the Bank of Japan's announcement to maintain its interest rate, market sentiment has improved, and the price of Bit has rebounded to $101,000, while the Gas fee has also fallen back to 10-12 Gwei.
Impact of the Bank of Japan's Interest Rate Decision
On December 18, the Bank of Japan announced that it would maintain its short-term policy interest rate at 0.25%, a decision that has had a significant impact on the global market. With the depreciation of the yen, the USD/JPY exchange rate briefly fell below 155, further driving the rebound in Bit prices. The Bank of Japan's policy decision, combined with the monetary policy expectations of the US Federal Reserve, has stimulated market demand for digital assets, particularly Bit and ETH.
With the fluctuations in the USD/JPY exchange rate, the price of Bit has also experienced volatility, rising from $98,770 to over $100,000. This volatility once again demonstrates the sensitivity of the cryptocurrency market to macroeconomic events, but also indicates the potential of digital assets as a hedge, attracting more and more investors.
Outlook for the Cryptocurrency Market
Despite the ongoing short-term market volatility, the growth potential of digital assets remains immense. The inflow trends of the Bit and ETH spot ETFs indicate that an increasing number of investors, particularly institutional investors, are viewing cryptocurrencies as part of their long-term investment strategies. This trend not only shows that digital assets are gradually entering the traditional financial market, but also lays the foundation for the mainstream adoption of digital currencies in the future.
With the development of the cryptocurrency market and the continued participation of institutional investors, more funds are likely to flow into this market, driving the value appreciation of Bit and ETH. Through financial instruments such as ETFs, the liquidity and market acceptance of digital assets will continue to improve, further promoting their application in wealth management and hedging strategies.
Conclusion
The inflows into the Bit and ETH spot ETFs indicate that investor interest in digital assets is growing rapidly, particularly with the participation of institutional investors. Although the market still faces some volatility and uncertainty, as the financial system gradually accepts cryptocurrencies, the process of mainstream adoption of digital assets will undoubtedly continue to accelerate. With the continued enhancement of Bit and ETH as core assets, the cryptocurrency market is expected to see more innovation and growth opportunities in the coming years.
