Ethereum ETF Outflows and Market Manipulation Concerns Impact Crypto Prices
By: Eva Baxter
The cryptocurrency market is experiencing turbulence with Ethereum (ETH) and Bitcoin (BTC) at the center of recent discussions. Ethereum's value edged towards $3,000 after a cooler-than-expected Consumer Price Index (CPI) report brought a positive reaction in stock markets. However, the optimism was dampened by a significant outflow from Ether ETFs, amounting to $553 million, raising concerns about diminishing institutional interest. The decline in ETH futures premiums and open interest suggests a cautionary stance among investors, without fully embracing a bearish outlook.
The situation is further complicated by recent moves from BlackRock, the world's largest asset manager, stirring unease within the market. BlackRock's transfer of 2,257 BTC and 74,973 ETH to Coinbase signaled potential sell-off plans, following the recording of outflows by Bitcoin and Ethereum ETFs on December 16. Such movements have prompted speculation regarding a strategic withdrawal of shares in response to the ETF outflows, specifically from their IBIT and ETHA ETFs.
Adding to the volatility is the theory of market manipulation, as highlighted by several crypto analysts. Accusations are aimed at Binance, with claims that the exchange manipulated prices through coordinated buying and selling, leading to dramatic price shifts. One observation noted Bitcoin's price spiking by $3,300 within 30 minutes, resulting in $106 million in short positions being liquidated. Consequently, $52 million in long positions were also cleared shortly after, leading to assertions that the price fluctuations were not merely coincidental, but rather deliberate liquidity hunts.
Despite these challenges, some crypto asset managers, such as Bitwise, remain optimistic about the future, forecasting new all-time highs for Bitcoin and Ethereum next year, citing factors like Bitcoin's halving and institutional investments as potential drivers. Meanwhile, Bitwise suggests regulatory advancements may encourage broader cryptocurrency adoption, enhancing market stability in the long run. This period of uncertainty highlights a precarious phase for both Ethereum and Bitcoin, underlining the influence of institutional actions and market sentiments on cryptocurrency valuations.
