Citi Says Bitcoin Spot ETF Outflows May Keep Crypto Sentiment Weak
Summary
- Citi said spot Bitcoin (BTC) ETF flows are a key variable for BTC prices, and that the recent run of 13 consecutive trading days of net outflows has put pressure on the token.
- Citi said spot ETF inflows are the single most important factor behind weekly swings in BTC returns, accounting for about 45%% of the variation.
- Citi said crypto-market sentiment is likely to remain weak if expectations for passage of the CLARITY Act continue to fade, while positive regulatory developments remain absent and demand for inflation hedges fails to recover.
Forecast Trend Report by Period
Citi said flows in and out of spot Bitcoin exchange-traded funds are a key driver of Bitcoin prices, and that investor sentiment in the cryptocurrency market may remain subdued for the time being.
CNBC reported on June 4 that Citi analyst Alex Saunders wrote in a report that spot ETF inflows are the single most important factor behind weekly swings in Bitcoin returns, accounting for about 45% of the variation.
ETF flows are the most effective gauge of investor demand, Saunders wrote. Bitcoin has come under pressure after spot ETFs posted net outflows for 13 consecutive trading sessions.
He also cited fading expectations for passage of the CLARITY Act as another drag on sentiment.
Without positive regulatory news or a recovery in demand for inflation hedges, market sentiment will probably remain weak for now, he wrote.
Bitcoin has recently seen heightened volatility amid spot ETF outflows, uncertainty over the US interest-rate outlook and geopolitical risks in the Middle East. Investors are watching ETF flows and progress on US crypto legislation as the key factors that will determine Bitcoin's direction.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
