Bitcoin ETFs in the US Experience $1.2 Billion in Longest Streak of Net Outflows
US bitcoin exchange-traded funds (ETFs) are experiencing a prolonged period of daily net outflows since their inception earlier this year, reflecting a broader shift away from riskier assets amidst a challenging global market environment.
Data compiled by Bloomberg reveals that investors withdrew nearly $1.2 billion from the 12 ETFs over the eight-day period ending on September 6. This trend coincides with a turbulent phase for stocks and commodities, driven by concerns over economic growth.
The recent volatility in financial markets can be attributed to a combination of factors, including mixed US jobs data and deflationary pressures in China. These uncertainties have had a ripple effect on the cryptocurrency market, with bitcoin’s performance increasingly mirroring movements in traditional stocks due to a heightened short-term correlation.
Bitcoin has faced challenges in September, registering a decline of around 7%. However, the digital asset showed some resilience over the weekend, edging up by approximately 1% to reach $54,870 by 1 p.m. on Monday in Singapore.
“The small relief rally appears to be fueled in part by influential figures closing out their short positions,” noted Sean McNulty, director of trading at Arbelos Markets. He highlighted a social media update from Arthur Hayes, co-founder of the BitMEX trading platform, as a contributing factor to the market sentiment.
The upcoming US presidential election is also playing a role in shaping market dynamics, with the pro-crypto stance of Republican nominee Donald Trump garnering attention. McNulty suggested that Trump’s improved performance in polls and prediction markets might be driving increased demand for options hedges ahead of the anticipated debate between Trump and Democratic nominee Vice President Kamala Harris.
The introduction of US bitcoin ETFs earlier this year generated significant excitement, propelling the token to a record high of $73,798 in March. However, the initial surge in demand has moderated, leading to a more tempered year-to-date rally of approximately 30%.
Looking ahead, bitcoin is expected to trade within the $53,000 to $57,000 range until the release of US consumer-price data on Wednesday. Caroline Mauron, co-founder of Orbit Markets, highlighted that these inflation figures could influence market expectations regarding potential monetary policy adjustments by the Federal Reserve.
In conclusion, the cryptocurrency landscape continues to evolve in response to shifting market dynamics and external factors, underscoring the interconnected nature of digital assets with traditional financial markets.
