US Bitcoin ETFs See Sustained Outflows, Bitcoin Price Rebounds Slightly Amid Market TurmoilUS Bitcoin ETFs have experienced their longest stretch of daily outflows since their launch earlier this year, as investors pull back from high-risk assets amid global market challenges. According to institutional data, investors withdrew nearly $1
US Bitcoin ETFs See Sustained Outflows, Bitcoin Price Rebounds Slightly Amid Market Turmoil
US Bitcoin ETFs have experienced their longest stretch of daily outflows since their launch earlier this year, as investors pull back from high-risk assets amid global market challenges. According to institutional data, investors withdrew nearly $1.2 billion from 12 US Bitcoin ETFs in the eight trading days ending September 6. The decline comes as both stock and commodity markets have been volatile due to concerns about economic growth. Factors such as mixed US employment data have weighed on sentiment among traders. This uncertainty is impacting the cryptocurrency market, with volatility increasingly linked to stock market moves due to a growing short-term correlation between the two.
Bitcoin has underperformed in September, falling about 7%. However, the largest digital asset rebounded slightly over the weekend, gaining about 1% on Monday to around $54,800 as of press time. "The slight market rebound seems to be attributed in part to some high-profile influencers covering their short positions," said Sean McNulty, head of trading at hedge fund liquidity provider ArbelosMarkets. He cited a recent social media post by Arthur Hayes, co-founder of the crypto exchange BitMEX, as an example. McNulty said that improved performance in polls and prediction markets by US presidential election Republican candidate Donald Trump, who is supportive of cryptocurrencies, may also have played a role. He reported increased demand for option hedges against volatility in the event of Tuesday's debate between Trump and Democratic vice presidential candidate Kamala Harris. Harris has not yet detailed her stance on cryptocurrencies.
US Bitcoin ETFs, which invest directly in the native cryptocurrency, were launched with much fanfare in January. Unexpectedly strong demand pushed the token to an all-time high of $73,798 in March. Inflows have since slowed, and Bitcoin's gains for the year to date have been capped at around 30%. Caroline Mauron, co-founder of digital asset derivative trading liquidity provider OrbitMarkets, said Bitcoin is likely to trade in a recent range of $53,000 to $57,000 ahead of the release of US consumer price data on Wednesday. The inflation figures could influence expectations for the pace of Federal Reserve monetary easing.
Recently, global stock and commodity markets have been impacted by concerns about economic growth, causing investors to pull back from risk assets, as reflected in the sustained outflows from US Bitcoin ETFs. Meanwhile, the cryptocurrency market has also been affected by stock market trends, resulting in increased volatility.
While Bitcoin has seen a slight rebound recently, partly due to high-profile influencers covering their short positions and improved market sentiment regarding Trump's performance in the US presidential election, uncertainty remains. Investors need to watch for the release of US consumer price data on Wednesday and the potential impact of the debate between Trump and Harris on market sentiment.
In summary, global markets are facing challenges, leading to a decline in investor appetite for risk assets and causing outflows from those assets, including the cryptocurrency market. While Bitcoin has witnessed a slight rebound lately, future market trends remain to be seen.
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