Bitcoin exchange-traded funds in the United States have recorded their longest streak of daily net outflows since their launch earlier this year, part of a broader exodus from riskier assets during a difficult period for global markets.
Investors pulled a total of about $1.2 billion from the group of 12 exchange-traded funds in the eight days ended Sept. 6, according to Bloomberg data. It comes amid a period of volatile stock and commodity prices due to concerns about economic growth.
Mixed US jobs data and deflationary pressures in China are casting a shadow over traders, as uncertainty grips the cryptocurrency market, whose trends have become closely linked to stock movements, based on the high correlation coefficient between the two in the short term.
Hedging Against Harris-Trump Debate
Bitcoin has faced challenges since the start of September, with its price falling by about 7%, but the world's largest digital asset made slight gains over the weekend, with the price of bitcoin up about 1% to $54,870 at 1 p.m. in Singapore on Monday.
“The slight uptick appears to be partly due to some prominent influencers closing short positions,” said Sean McNulty, head of trading at liquidity provider Arbelos Markets, giving the example of a recent social media post by Arthur Hayes, co-founder of Bitcoin exchange BitMEX.
He added that the improved performance of Donald Trump, the cryptocurrency-friendly Republican presidential candidate, in the polls and market expectations may have also played a role. He also pointed to the surge in demand for options contracts to hedge against potential volatility from Tuesday’s debate between Trump and Democratic candidate Kamala Harris, the current vice president, who has not yet made her position on cryptocurrencies clear.
Waiting for US inflation data
Bitcoin exchange-traded funds in the United States invest directly in the world’s largest cryptocurrency, which was launched with great fanfare in January. The unexpectedly high demand helped propel the cryptocurrency’s price to a record high of $73,798 in March. But inflows have since slowed, and bitcoin’s price has fallen by about 30% since the start of the year.
Caroline Morone, co-founder of Orbit Markets, which provides liquidity for trading in digital asset derivatives, said the cryptocurrency is likely to trade within its recent price range of $53,000 to $57,000 until U.S. consumer price data is released on Wednesday. The inflation data could set the tone for expectations about the extent of the Federal Reserve’s expected monetary easing.
