Crypto
Bitcoin Slips Below $68K as ETFs Bleed $64.9M, Asian Stocks Drop 1%
Bitcoin falls below $68K amid $64.9M ETF outflows and broader market declines.
Key Takeaway
- Bitcoin fell over 2% to $67,900 amid $64.9 million outflows from U.S.-listed spot bitcoin ETFs, the first loss since May.
- Asian stocks declined, led by a 1% drop in Chinese equities due to property market concerns and potential Bank of Japan policy changes.
- U.S. Treasuries saw gains with the 10-year yield falling three basis points to 4.45%, as investors await Wednesday's CPI release and Fed rate decision.
Bitcoin and Ether Decline
Bitcoin, the leading cryptocurrency by market value, experienced a notable decline, falling over 2% to $67,900. This drop extends the retreat from recent highs near $72,000. Ether, the second-largest cryptocurrency, also saw a dip, falling below $3,550 at one point. The broader CoinDesk 20 Index, which tracks the performance of the top 20 cryptocurrencies, fell 1% to 2,370 points.
The losses in the crypto market coincided with $64.9 million in cumulative outflows from U.S.-listed spot bitcoin exchange-traded funds (ETFs). This marks the first loss since at least May 23, according to provisional data published by Farside Investors. Despite recent strong inflows, market chatter suggests that these inflows stem from institutions' growing interest in the non-directional basis trade rather than outright bullish bets.
Traditional Markets Influence
The crypto market's decline mirrored broader risk-off sentiment in traditional markets. Chinese stocks fell over 1%, leading losses in Asian equity indices amid lingering property market concerns and reports that the Bank of Japan could trim its liquidity-boosting bond purchases this week. The dollar index, which measures the greenback's exchange rate against a basket of major fiat currencies, consolidated on two-day gains. Meanwhile, prices for U.S. Treasuries, considered a safe haven, ticked higher, pushing yields lower. The yield on the benchmark 10-year note fell by three basis points to 4.45%, according to TradingView.
Recent political developments in Europe also added to market uncertainty. Gains for right-wing parties in European elections and a snap poll announcement by France revived concerns about the cohesion of the European Union. This political uncertainty further contributed to the risk-off sentiment in the market.
Anticipation of U.S. CPI and Fed Decision
The crypto market's decline also comes as traders await key economic data and decisions from the U.S. Federal Reserve. Wednesday's U.S. Consumer Price Index (CPI) release and the Federal Reserve's monetary policy decision have kept investors on edge. The Federal Open Market Committee (FOMC) will publish its latest quarterly projections, including the interest rate dot plot, which provides insights into the future path of interest rates.
Bitcoin, in particular, wobbled on Tuesday, sliding as much as 2.5% to a one-week low before stabilizing at $68,000 as of 10:42 a.m. in Singapore. Smaller tokens such as Ether and Dogecoin also nursed losses. Bitcoin had hit a record high of $73,798 in March, lifted by inflows into dedicated U.S. exchange-traded funds, but has struggled to reach new highs since then. The upcoming inflation data and Fed outlook may cement fears that interest rates will stay higher for longer, creating a challenging backdrop for speculative assets like cryptocurrencies.
Anand Gomes, co-founder of the derivatives platform Paradigm, commented on the market's behavior, stating, "No news is bad news in crypto. The market is like a junkie that constantly needs bullish news to stay up. So when there is none, the path of least resistance is lower."
