Crypto takes a spill

Bitcoin was clinging to $66,000 as of 6:30 a.m. (EST) on Tuesday after a swift, steep plunge late last night.

When we checked again, as of 8:10 a.m. (EST), BTC slid further to roughly $65,700.

Among several negative catalysts – such as steepening baked-in market volatility, ETF outflows and a strengthening greenback – there was also this: the de-peg of the crypto sector’s largest stablecoin, Tether. At one momentary juncture overnight, USDT fell to $0.988. But, as of 8:11 a.m. (EST), USDT was back at $1.

Tether, as it turns out, added more BTC to its balance sheet during the first quarter. The giant stablecoin issuer now holds over $5.1 billion worth of the asset. Tether pledged last year that it would regularly allocate a portion of profits towards purchasing BTC to hold in reserves (Decrypt).

We're allotting extra precious minutes this morning trying to figure out why Core (CORE) is rallying so vigorously when all other Top 100 coins are ruby red. Core’s native asset CORE moments ago exceeded the $3 mark on a gain of 11% overnight. CORE is up 240% in the past week.

The native asset of the Core DAO, CORE initially surged above $1 following the introduction of Core Ignition, a six-month incentive program for the so-called BTCfi ecosystem. The Core chain is built around a consensus mechanism, Satoshi Plus, based on a meld of elements connected with Proof-of-Work (PoW) and Delegated Proof of Stake (DPoS). The supply of CORE tokens has been inflating steadily in the past several months, points out a Bitcoin Strategy channel analyst who simply goes by the name of "Gerhard."

Fascinatingly, he said of CORE's inexplicable run: "We do not see that there is more adoption on chain; we don't see the number of transactions going up; nor do we see the number of wallets; and, if we take away the price increase, we don't see total value locked going up, either."

Ah, who knows, maybe a few central players are pushing Core's price up. It happens.

Meanwhile, providing further proof to the notion that the felines have an innate knack for paws-first landings, Catcoin is one of today's biggest gainers (+34% in 24 hours) after leading in losses just yesterday.

And a project called GXChain has turned in single biggest gain (+410%) on an otherwise lousy day for digital assets (total market down 6%).

GXC is the 341st-largest coin, per CoinDesk. It's yet another odd duck.

Because as far as we can tell this entire project was slated (like, two years ago) to have been rebranded to REI Network, described as a low-cost, EVM-compatible blockchain.

Last night, Bitcoin fell from above $69K to below $66K. The plunge took place in 30 scary minutes, according to TradingView.

Leveraged traders exposed to BTC (and to ETH, DOGE, SOL, as well as some other assets) endured $400 million in losses owing to snap liquidations.

Decrypt, citing CoinGlass data, said Bitcoin alone experienced some $90 million in long positions getting wiped clean overnight.

A handful of dominant BTC ETF providers did have inflows to start the new month but wouldn’t you know it, right there waiting to negate that positivity – of course – was Grayscale's converted GBTC vehicle, which saw $302.6 billion in outflows on Monday.

Grayscale's relatively higher-fee Bitcoin fund, GBTC, has seen total outflows hit the $15 billion mark since early January.

“I thought this would have slowed down by now,” Bloomberg ETF analyst James Seyffart said yesterday regarding GBTC's unabated hemorrhage.

It was another busy day for the sector. According to The Block's data dashboard, U.S. spot BTC ETFs generated $3 billion in trading volume on Monday.

BlackRock’s IBIT led the way with $1.4 billion. Fidelity’s FBTC generated $556 million.

However, as The Block noted, daily trading volumes have declined since a peak of $9.9 billion in early March when BTC first broke past $69,000, the highwater mark associated with the last bullish cycle that culminated in November of 2021.

All told, in the historic Q1 of '24, BTC ETFs had net inflows of more than $12 billion, according to BitMEX Research.

That figure reflects GBTC having $14.7 billion of outflows. Those outflows were held in check by IBIT's whopping haul (net inflow of $13.9 billion).

"IBIT is the fastest growing ETF in history," Blackrock CEO Larry Fink recently bragged to Fox Business.

Impressive ETF inflows are credited with breathing fire into the underlying BTC price during the first three months of the year, a period in which the largest crypto shot up about 67%.

Looking bigger picture, down the line, a Bitwise analyst, Matt Hougan, said he expects inflows into spot BTC ETFs to continue.

He predicts more asset managers will develop their own BTC strategies amidst long-term, sustained demand.

"The truth is," Hougan said on X, "most professional investors still can't buy BTC ETFs."

Roadblocks will start to vanish, per Investopedia, only after numerous individual due diligence processes are undertaken by financial industry members over the next few years.