- • Crypto markets dropped despite the debut of spot Bitcoin and Ethereum ETFs in Hong Kong, with Bitcoin trading below $61,000 and Ethereum around $3,000.
- • The six Bitcoin and Ether ETFs that began trading in Hong Kong on Tuesday generated just $11 million in trading volume, far below expectations.
- • Stocks also declined ahead of the Fed meeting, with crypto-related stocks like MicroStrategy and Coinbase registering losses.
Major cryptocurrencies like Bitcoin and Ethereum dropped in value on Tuesday despite the launch of the first spot Bitcoin and Ethereum exchange-traded funds (ETFs) in Hong Kong. The debut of these ETFs was expected to boost crypto prices, but trading volume fell short of expectations.
Disappointing Trading Volume for New ETFs
Six new crypto ETFs began trading on the Hong Kong Stock Exchange on Tuesday. However, trading volume totaled just $11 million, far below the anticipated $100 million. The Bitcoin ETFs accounted for $8.5 million, while the Ether ETFs contributed the remaining amount.
Analysts suggest the ETF launches failed to live up to their hype. Since January, nearly a dozen Bitcoin spot ETFs have started trading in the U.S. and attracted close to $12 billion in investments. The first-day trading volume for the U.S. Bitcoin ETFs totaled $655 million in comparison.
Spot ETFs give investors exposure to the underlying asset, like Bitcoin, without requiring them to directly own or custody the coins.
Macroeconomic Concerns Weigh on Crypto
This week brings several potentially market-moving economic announcements, like the two-day Federal Reserve policy meeting. The confluence of macroeconomic news has crypto traders on edge.
On Tuesday, stocks turned negative after higher-than-expected wage growth raised inflation concerns ahead of the Fed gathering. The S&P 500, Nasdaq, and Dow all closed lower on the day. Crypto-exposed stocks like MicroStrategy and Coinbase saw steeper declines.
Bitcoin mining equities also sank, with Marathon Digital, Riot Platforms, and Bitfarms losing 4-7% each.
Conclusion
In summary, disappointing trading volume for the new Hong Kong Bitcoin and Ethereum ETFs failed to boost crypto prices on Tuesday. Broader macroeconomic uncertainty heading into the Fed’s policy meeting also weighed on digital asset prices. Bitcoin dropped below $61,000, while Ethereum slipped under $3,000. Crypto markets continue to feel pressure as investors eye the Fed’s response to inflation and wage growth data in the coming days.
