US Bitcoin exchange-traded funds (ETFs) are currently experiencing their longest streak of daily net outflows since being introduced earlier this year, Bloomberg reported on 9 September 2024. Investors have pulled around $1.2 billion from a group of 12 spot Bitcoin ETFs over the eight days ending 6 September, reflecting a broader move away from riskier assets during a challenging period for global markets.
Bloomberg’s data highlights that the cryptocurrency sector has been caught in a wave of uncertainty due to several economic factors. The market downturn comes amid mixed employment data from the US and growing deflationary concerns in China, which are affecting trader sentiment. This instability is driving a closer correlation between cryptocurrency and traditional equities, increasing the pressure on Bitcoin as both markets struggle.
Bitcoin’s performance in September has been weak, with the cryptocurrency posting a loss of about 7% during the month, according to Bloomberg.
Source: TradingView
However, on the weekend leading up to 9 September, Bitcoin saw modest gains, rising by about 1% to reach $54,870, with activity peaking around 1 p.m. on Monday in Singapore.
Per the Bloomberg report, Sean McNulty, director of trading at Arbelos Markets, attributed this small recovery to some prominent figures in the crypto space closing their short positions. McNulty referenced a social media post from Arthur Hayes, co-founder of the BitMEX platform, as one such example. McNulty also noted that political developments, particularly the improved polling of pro-crypto Republican candidate Donald Trump in the upcoming US presidential election, might be influencing market sentiment. With a debate between Trump and Democratic candidate Kamala Harris on the horizon, McNulty reported increased demand for hedging strategies in anticipation of potential market volatility.
The Bloomberg report went on to say that these ETFs, which were launched in January with strong enthusiasm, initially drove the cryptocurrency to an all-time high of $73,798 in March. However, as demand for the funds began to stabilize, Bitcoin’s rally has since slowed, leaving the token with a year-to-date gain of approximately 30%. Bloomberg noted that the cryptocurrency is now likely to remain within its current trading range of $53,000 to $57,000, at least until the release of US consumer-price index data on Wednesday. According to Caroline Mauron, co-founder of Orbit Markets, this inflation data could significantly impact the market by shaping expectations around the Federal Reserve’s future monetary policy.
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