Bitcoin exchange-traded funds (ETFs) in the US are experiencing their longest consecutive stretch of net outflows since their launch earlier this year. Over the course of eight days leading up to September 6, investors pulled nearly $1.2 billion from 12 Bitcoin ETFs, according to data compiled by Bloomberg. The withdrawals come during a challenging period for global markets, where riskier assets have seen significant declines.
Global Market Challenges Weigh on Cryptocurrencies
The outflows from Bitcoin ETFs coincide with a broader market retreat. Worries about economic growth, mixed US jobs data, and deflationary pressures from China have all contributed to increased volatility. This uncertainty has affected the cryptocurrency market, with Bitcoin showing increasing correlation to stock movements.
In September, Bitcoin has posted a loss of around 7%. However, over the past weekend, the digital asset managed a modest recovery, rising by approximately 1% to $54,870 as of 1 p.m. in Singapore on Monday.
Influencers and Market Sentiment
Sean McNulty, director of trading at Arbelos Markets, noted that the slight rally in Bitcoin was partly driven by prominent figures in the crypto space closing out their short positions. He pointed to a recent social media post by Arthur Hayes, co-founder of BitMEX, as an example of influencers impacting market movements.
Another factor influencing the market could be political developments in the US. McNulty highlighted that increased demand for options hedges ahead of the debate between Donald Trump, the pro-crypto Republican candidate, and Democratic nominee Vice President Kamala Harris, might also be contributing to Bitcoin’s recent movements.
Bitcoin ETFs’ Rollercoaster Year
The introduction of US Bitcoin ETFs in January garnered significant attention, with strong demand pushing Bitcoin to a record high of $73,798 in March. However, since then, inflows have tapered off, and Bitcoin’s year-to-date rally has slowed to around 30%.
Caroline Mauron, co-founder of Orbit Markets, expects Bitcoin to remain within its recent trading range of $53,000 to $57,000 until the release of key US consumer-price data on Wednesday. The inflation report is likely to influence expectations for future monetary policy actions by the Federal Reserve.
