(Bloomberg) — U.S. bitcoin exchange-traded funds have recorded their longest streak of daily net outflows since the stock began trading at the start of the year, part of a broader retreat from riskier assets amid challenging times for global markets.
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Investors pulled nearly $1.2 billion from the group of 12 ETFs in the eight days through Sept. 6, data compiled by Bloomberg showed. The decline comes amid a tumultuous period for stocks and commodities on concerns about economic growth.
Mixed U.S. jobs data and deflationary pressures in China are both taking a toll on traders. The uncertainty is plaguing the crypto market, whose swings have become more closely tied to stock movements based on a rising short-term correlation between the two.
Bitcoin has struggled in September, losing about 7%. But the largest digital asset posted modest gains over the weekend, climbing about 1% to $54,870 at 1pm on Monday in Singapore.
Hedging for debate
“The small relief rally appears to be partly driven by some prominent influencers closing their shorts,” said Sean McNulty, director of trading at liquidity provider Arbelos Markets. He cited a recent social media post from Arthur Hayes, co-founder of the BitMEX trading platform, as an example.
An improved performance by Donald Trump, the pro-crypto Republican presidential candidate, in polls and prediction markets could also play a role, McNulty said. He noted increased demand for options hedges in case Tuesday’s debate between Trump and Democratic nominee Vice President Kamala Harris sparks volatility. Harris has yet to clarify her stance on crypto.
The US Bitcoin ETFs, which invest directly in the native cryptocurrency, debuted in January to much fanfare. Unexpectedly strong demand for the funds helped propel the token to an all-time high of $73,798 in March. Inflows subsequently slowed, and Bitcoin’s rally so far this year has cooled to around 30%.
The token is likely to trade in its recent $53,000 to $57,000 range until the U.S. releases consumer price data on Wednesday, said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for digital asset derivatives trading. The inflation figures could affect expectations for the pace of expected monetary easing by the U.S. Federal Reserve.
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