US Bitcoin ETFs see a 40% drop in inflows, mirroring concerns of stagflation. With worrisome economic signals and institutional caution, the crypto market holds its breath. Explore the reasons and implications of this slowdown.
Institutional investors are closely monitoring the American economic indicators, leading to a 40% decrease in inflows into Bitcoin ETFs in cash last week. This increased caution is due to growing concerns about a stagflation scenario.
According to CheckOnChain data, Bitcoin ETFs in the United States recorded $1.81 billion in net inflows last week, compared to $3.06 billion the previous week. This 40% decrease reflects investors’ concerns regarding:
These negative signals reinforce expectations of an explosive mix of sluggish growth and stubborn inflation, in other words, a sustainable “stagflation.”
For your information, stagflation is an economic phenomenon characterized by the combination of three elements:
Despite this overall decline, some ETFs have continued to attract capital:
This dynamic reflects a concentration of flows on market leaders, to the detriment of smaller managers.
While last week saw a significant slowdown, the month of April as a whole remains positive with nearly $3 billion in net inflows. This demonstrates renewed institutional interest despite economic turbulence. As Crypto_birb indicates, ETF volumes have almost returned to levels not seen since the March crash.
Faced with these macroeconomic uncertainties, the price of Bitcoin has fluctuated between $93,500 and $96,000 in recent days. Investors are now closely watching the Federal Reserve’s monetary policy decision, which is expected to keep its benchmark interest rate unchanged at 4.5%.
This is compounded by Trump, and even Warren Buffet, casting doubt on a potential imminent market recession with a weakening dollar.
In conclusion, the sharp decrease in flows in Bitcoin ETFs reflects an increased nervousness among institutional investors regarding alarming economic signals. However, the fundamental appeal for cryptocurrency remains strong, as evidenced by the positive balance in April.
The coming weeks will be crucial for the future of Bitcoin ETFs, which will have to deal with limited economic visibility across the Atlantic. Their ability to overcome this phase of uncertainty will be crucial for their widespread adoption.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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