US bitcoin ETFs have $1.2 billion in longest period of net outflows

(Bloomberg) — U.S. bitcoin exchange-traded funds (BTC-USD) posted their longest period of daily net outflows since listing at the start of the year, as part of a broader retreat from riskier assets during a difficult period for global markets.

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Investors pulled nearly $1.2 billion in total from the group of 12 ETFs in the eight days to Sept. 6, data compiled by Bloomberg showed. The drop comes amid a tough period for stocks and commodities amid economic growth.

Mixed US jobs data and deflationary pressure from China weigh on traders. Uncertainty is weighing on the cryptocurrency market, whose swings have become more closely tied to stock movements based on a growing short-term correlation between the two.

Bitcoin struggled in September, losing about 7%. But the biggest digital asset made modest gains over the weekend and was up about 1 percent to $54,870 as of 1 p.m. in Singapore on Monday.

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“The small improvement appears to be driven in part by some prominent influencers closing their shorts,” said Sean McNulty, director of trading at liquidity provider Arbelos Markets. He cited as an example a recent social media post from Arthur Hayes, co-founder of the BitMEX trading platform.

An improved showing of Donald Trump, the pro-crypto Republican candidate for the US presidential election, in polls and prediction markets could also play a role, McNulty said. He reported higher demand for options hedges should Tuesday’s debate between Trump and Democratic vice presidential nominee Kamala Harris spark volatility. Harris has yet to elaborate on his position on crypto.

US bitcoin ETFs investing directly in the original cryptocurrency debuted in January with much fanfare. Unexpectedly strong demand for funds helped push the token to a record high of $73,798 in March. Thereafter, flows moderated and bitcoin’s annual growth cooled to around 30%.

The token will likely trade in its recent range of $53,000 to $57,000 until the U.S. releases consumer price data on Wednesday, said Caroline Mauron, co-founder of Orbit Markets, a liquidity provider for digital asset derivatives trading . Inflation numbers can shape expectations about the pace of anticipated monetary easing by the US Federal Reserve.

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