Why Bitcoin’s sell-off was a regular Tuesday for crypto: Expert
Bitcoin (BTC-USD) showed significant volatility Tuesday, with its price experiencing a notable sell-off followed by a quick recovery. To shed light on the factors driving this turbulence, Scott Melker, the host of The Wolf Of All Streets podcast, joins Yahoo Finance Live.
Melker advises investors following Bitcoin to “zoom out and just calm down,” suggesting that the recent sell-off was merely “a flush” of the leverage that had accumulated in the market. He notes that approximately $1 billion worth of Bitcoin positions were liquidated on Tuesday, a normal occurrence in the cryptocurrency markets.
According to Melker, the underlying catalyst for the heightened volatility is the recent approval of Bitcoin Spot ETFs (Exchange-Traded Funds). These ETFs have attracted “massive daily inflows,” with Melker expecting these inflows to continue, contributing to the market’s turbulence.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Angel Smith
Video Transcript
[AUDIO LOGO]
JOSH LIPTON: Insane and volatile, just two words how our next guest describes the last 24 hours in Bitcoin trading. Bitcoin hitting a new all-time high and then plunging, only then climb higher. It has been a Rocky road for investors trying to digest the moves and may what come next.
Joining us now is Scott Melker, crypto commentator and host of the “Wolf of Wall Street” podcast and YouTube series. Scott, it is good to see you. I don’t know, Scott, if we should ever try and make a call on where Bitcoin is headed in the near term. It sounds tough, but the surge has been incredible. We saw, of course, the drop yesterday. But still, I mean, a move of 50% already this year, Scott. Interested just high level, what do you make of the move we’ve seen, Scott? And where do you see us headed from here in the near to intermediate term, let’s call it?
SCOTT MELKER: Well, first of all, I think that anyone looking at Bitcoin on a daily basis should just zoom out and calm down, because we see this kind of volatility we literally just call it Tuesday in the crypto market. And it happened to have been on a Tuesday.
But no surprise when there was leverage built up and massive open interest that we saw a flush of that leverage. And that’s all it was yesterday. We saw $1 billion liquidated, which is pretty insane. But if wondering what is driving this fundamental move, it’s obviously the approval of the Bitcoin spot ETFs and in advance of that, the narrative that those Bitcoin spot ETFs would get approved.
We’re seeing absolutely massive daily inflows. Even with the drop yesterday from 69,000 down to 59,000, we saw over 700 million into iBit, which is BlackRock spot ETF alone. So with that much buying, we can see these flows. It’s very transparent. We have a fundamental reason why we’re seeing Bitcoin continue to rise. And I don’t see those flows stopping anytime soon.
And the reason for that is because they haven’t even been unlocked, these products, for most RIAs, for most institutional platforms. We know Vanguard doesn’t even offer these products, maybe they won’t. Merrill Lynch just approved a few of them. We have RIAs like Carson Group, the $30 billion asset under management group, that has now approved four of these.
So this trickle of approvals, people doing their due diligence has just started. So as more of them come online, we’re definitely going to continue to see a lot more buying of these spot ETFs, which means a lot more buying of spot Bitcoin.
