Automated ETF trading bots cause volatility among Asian bitcoin investors: report

A recent volatility in Bitcoin prices in Asia has been closely linked to US ETF flows tracked by automated trading algorithms.

As spot Bitcoin exchange-traded funds (ETFs) stream data, Asian investors face turbulent times.these automated trading bots are potentially causing significant market volatility.

Bitcoin Volatility in Asian Trading Market

Shiliang Tang, president of Arbelos Markets, recognised the importance of these automated bots, saying, “From an algorithmic trading perspective, robots can crawl and trade based on this data; it appears that this is what is happening now.” Following the close of trading in the US stock market during Asian hours, news of the daily demand levels for these spot Bitcoin ETFs rippled throughout the cryptocurrency market. On April 2, Bitcoin fell during the Asian trading session, coinciding with rumors of investors withdrawing funds from these ETFs.

Bitcoin’s price fell to $64,650 on April 2, representing a 6% decline in one day. This fall sparked an increase in volatility across the whole cryptocurrency market. Bitcoin is currently worth approximately $66,000. The approval of various spot Bitcoin ETF applications by the US Securities and Exchange Commission (SEC) in early January resulted in around $12 billion in net inflows into the market. The peak in ETF inflows corresponded with Bitcoin’s new all-time high of $73,737 in mid-March. However, additional outflows have contributed to BTC’s current drop of over 10% from its peak.

Spot Bitcoin ETF Outflows and Bitcoin Corrections

On Monday, April 1, spot Bitcoin ETF flows returned to negative territory, with another major outflow from Grayscale and a smaller one from Ark 21 Shares. According to Farside Investors data, the overall outflow for the eleven spot-based investment products totaled $85.7 million, or 1,200 bitcoin.

Bloomberg’s ETF analyst, James Seyffart, expressed astonishment at the development, saying, “Honestly higher than I expected,” before adding, “thought this would have slowed down by now.”

In early March, Galaxy Digital CEO Michael Novogratz predicted market corrections and consolidation before Bitcoin rocketed to new highs. Despite the market’s inflated state, Novogratz remains hopeful about the future. He thinks that the US Securities and Exchange Commission will approve spot Ethereum ETFs later this year.

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