(Bloomberg) — Bitcoin fell for a fourth straight trading day, part of a broader crypto selloff that contrasts with recent record highs in global stocks.
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The digital asset fell 2.5% to trade at around $56,870 at 9:25 a.m. Friday in Singapore, while smaller coins such as Ether and XRP also posted losses.
Crypto speculators are currently facing a range of challenges, including declining demand for US Bitcoin ETFs, signs that governments are selling off seized tokens, and the elusive impact of political unrest in the US.
Additionally, operators of the failed Mt. Gox exchange are gradually returning a cache of Bitcoin to creditors. Speculators are unsure how much of the $8 billion haul will ultimately be sold. A wallet linked to Mt. Gox moved $2.7 billion worth of the tokens on Friday, according to Arkham Intelligence.
Correlation Frays
Meanwhile, MSCI Inc.’s gauge of global equities is hovering near a record high, and the short-term 30-day correlation between Bitcoin and the index is falling. The question is whether the risk-off attitude toward crypto is isolated or also heralds a cautious quarter for mainstream investing after a strong first half for equities.
“There’s just a general lack of buzz in crypto markets right now,” said Stefan von Haenisch, head of trading at OSL SG Pte. “Most of the news that’s being circulated right now, for example the Mt. Gox selloff, is more bearish in nature.”
Von Haenisch said crypto needs more dove-like notes on the Federal Reserve’s monetary policy, adding that “one to two rate cuts, coupled with the Fed’s balance sheet expansion, are two key ingredients that crypto is really waiting for.”
Investors are awaiting U.S. jobs data later Friday for the latest clues on the outlook for Fed policy. Recent soft economic reports have bolstered the case for the U.S. central bank to ease monetary policy in the months ahead.
Bitcoin hit a record high of $73,798 in March, buoyed by unexpectedly strong demand for the token’s inaugural U.S. ETFs. Inflows have since slowed, pushing Bitcoin lower and casting a shadow over the rest of the digital asset market.
Approvals for the launch of US ETFs for the No. 2-ranked token Ether are still pending, but interest in the products could be mixed if the crypto sell-off continues.
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