Crypto markets appear calm heading into the weekend after a volatile week that tested how institutional investors new to crypto trading would react to large swings that are old hat for more seasoned digital currency investors.
The sell-off of bitcoin and ether began earlier this week and wiped out $367 billion in value as markets in Japan plunged. But apparently, these new crypto traders were ready to buy the dip.
The country’s ether exchange-traded funds collectively saw net inflows of around $120 million this week, with most traders buying on Monday and Tuesday, when the world’s second-largest cryptocurrency fell 42% from its peak price of March of more than $4,000.
Although net flows for spot Bitcoin ETFs have been negative since Monday, data from crypto-analytics firm CoinGlass shows that demand began to pick up again midweek, with the group of spot funds adding more than $245 million of Wednesday and Thursday.
Bitcoin and Ether, 1 month
Hundreds of millions of dollars began pouring into bitcoin ETFs on the same day that Morgan Stanley gave the green light to its 15,000 financial advisers to begin offering clients with a net worth of $1.5 million in funds issued by BlackRock and Loyalty.
The bank, which is one of the world’s largest wealth management firms, is the first of the big players on Wall Street to take this step. Up until this point, wealth management businesses have only facilitated trades if clients specifically requested exposure to these new spot crypto funds.
Of Morgan Stanley’s $1.5 trillion in assets under management, the bank disclosed in a May 13 filing that it held about $270 million in spot bitcoin ETFs. The upcoming filing deadline on Wednesday will provide the latest reading on how much exposure banks and hedge funds now have to these crypto products.
The expectation is that other network bureaus and asset managers, which have been on the sidelines performing internal due diligence on crypto ETFs, may feel the pressure to soon follow Morgan Stanley’s lead.
Ether spot ETFs, which launched less than three weeks ago, have seen relatively tepid flows compared to the successful launch of Bitcoin spot ETFs in January. Bitcoin funds collectively hold $54.30 billion in assets under management, compared to $7.25 billion in spot ether funds.
Moving in step with US stocks
The crypto market traded in lockstep with US stocks most of the week.
The market cap of all tokens has recovered hundreds of billions of dollars since Monday and is now over $2.1 trillion.
Bitcoin hit an intraday high of nearly $63,000 on Friday, and ether traded above $2,700 earlier.
More than $100 million in short bets on bitcoin were liquidated in the past 24 hours, helping support bitcoin’s gains.
Although bitcoin and ether are well off Monday’s intraday lows, both assets are still down over the past seven days, with ether on pace for its worst week in nearly two years.
It’s a similar story with some of the crypto-related stocks. Coinbase, Microstrategyand bitcoin miner Riot platforms shares posted their third consecutive weekly loss.
Crypto price movements this week have highlighted how much digital assets continue to track US stocks and how they tend to respond to the same macro triggers.
Earlier this week, a softening yen trade contributed to the turmoil that roiled global markets, and then on Thursday, new jobless claims data came in lower than expected, helping to ease recession fears. . The S&P 500 posted its best day in almost two years on Thursday and the crypto market rallied.
It also helps that the regulatory winds seem to be shifting.
However, another US judge has sided with the crypto industry in a legal battle against the Securities and Exchange Commission.
District Judge Analisa Torres ordered Ripple to pay $125 million in civil penalties — which was significantly less than the $2 billion the SEC was seeking. Ripple’s XRP token surged 22% Thursday on the news.
