Bitcoin Needs Stable Treasury Yields, Renewed ETF Inflows to Extend Rally, Wintermute Says

Bitcoin needs stable U.S. Treasury yields and renewed inflows into spot exchange-traded funds to regain its upward momentum, digital-asset market maker Wintermute said.

In a post on X on Oct. 13, Wintermute wrote that the crypto market has lost the momentum previously driven by capital inflows, while the U.S. stock market continues to be supported by corporate earnings. The firm said it would take a more positive view on digital assets if Treasury yields stabilize and ETF inflows resume.

Wintermute said the Federal Reserve's hawkish stance has recently weighed on crypto markets. Minutes from last week's Federal Open Market Committee meeting showed many officials expect another rate increase this year, while the yield on the 10-year U.S. Treasury climbed to 5.24%.

The S&P 500 rose 1.2% last week to a record high, but Bitcoin and Ether fell 3.2% and 7.0%, respectively.

U.S. equities have been able to withstand higher Treasury yields because earnings growth is supporting valuations, Wintermute said. Crypto lacks that kind of corporate-profit support. In a high-rate environment, prices can continue rising only if fresh money keeps flowing in.

U.S. spot Bitcoin ETFs recorded about $679 million in net outflows last week, the largest weekly withdrawal since late June. Spot Ether ETFs also posted about $542 million in outflows.

Wintermute said the crypto market needs two conditions to recover its uptrend: stable long-term Treasury yields and a return to net inflows for spot ETFs. Until those conditions are met, Bitcoin is expected to remain a volatile risk asset with bigger swings than equities.

The firm added that investors should take a more cautious view if the 30-year U.S. Treasury yield rises above the 5.64% reached on Sept. 30, or if Bitcoin repeatedly fails to rebound near $82,500.