The second development CZ pointed to was the outflow of funds from spot cryptocurrency ETFs in the US. According to Farside Investors data, spot Bitcoin ETFs experienced net outflows on all seven trading days between November 5 and 13. Of the total outflow of $1.91 billion, approximately $1.42 billion came from BlackRock’s IBIT fund. Spot Ethereum ETFs also lost a net $592 million during the same period. CZ added that the coincidence of the IPOs and ETF outflows does not suffice to establish a cause-and-effect relationship between them.
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Binance Attack, iPhone Wallets, and FED Expectations Also on the Agenda
CZ cited the Binance attack, the emptying of iPhone-linked crypto wallets, a security vulnerability in Chrome, and a service outage at Microsoft as developments that could undermine confidence. He said that following these events, some investors might be more reluctant to hold their funds in crypto.
CZ stated that high inflation in the US has strengthened those expecting another interest rate hike from the Fed, adding that rising bond yields and a strong dollar could put pressure on risky assets like cryptocurrencies. On the political front, he drew attention to concerns that cryptocurrency policy might become tighter following the US midterm elections.
CZ stated that while no one knows the exact reason for the decline, he maintains his view that the cryptocurrency sector will continue to grow in the medium to long term. He also added that these assessments are his personal opinions.
*This is not investment advice.
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