Bitcoin

Bitcoin ETF

The launch of spot ETFs in Hong Kong in early May was the last significant event that could have shifted Bitcoin from its stagnation. Despite the ETF market&#39;s small capitalization of $50 billion (compared to $9 trillion in the US), hopes were high due to rumors of inclusion in the Stock Connect system, granting access to mainland Chinese investors. However, these hopes were dashed when the Hong Kong Stock Exchange denied the rumors. On May 13, 2024, Chinese ETFs with Bitcoin experienced their largest outflow of $32.7 million. American ETFs haven&#39;t fared much better: after a month of sell-offs, they returned to a nominal inflow, closing the last week with $286 million. In this context, Bitcoin is performing well, avoiding a full correction. The maximum drawdown from its record level is only 23%, whereas in previous bull cycles it ranged from 36% to 71%. A key factor in stabilization is institutionalization. As Bitcoin gains recognition and integrates into the traditional financial system (through ETFs), volatility decreases. Large American investors, previously wary due to the risk of sudden bans on cryptocurrency operations (as happened in China), are now increasingly considering investments. Even JPMorgan, whose CEO once called Bitcoin a fraud and an asset with zero value, declared to the SEC on May 10 the purchase of shares in spot Bitcoin funds totaling $760,000. The purchase size is modest compared to their assets under management, but it marks the beginning of investments in cryptocurrency. As inflows into spot ETFs have significantly slowed and exchange activity dropped by 43.8% in April (compared to March), macroeconomic factors are becoming more prominent. This week, the main focus will be on data from the US. The Federal Reserve had planned to start lowering the key rate in June, but the rise in inflation to 3.5% in March forced a revision of the timeline. However, according to CoinFactiva analysts, April data could bring a surprise: if there is a significant decrease in inflation, the chances of a monetary policy reversal in the summer will increase significantly. This, in turn, would strengthen risk assets, including Bitcoin. The data will be released today, May 15.Full story: <a href="https://coinfactiva.com/coinfactiva-analysts-record-outflow-from-hong-kong-etfs/" rel="noopener noreferrer nofollow">https://coinfactiva.com/coinfactiva-analysts-record-outflow-from-hong-kong-etfs/</a>#CoinFactiva #Bitcoin

CoinFactiva Analysts Report: Record Outflow from Hong Kong ETFs

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