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Bitcoin Down for Fourth Day Even as Global Stocks Hit Records
Bitcoin sank for the fourth consecutive trading session, part of a broader Encrypt sales that contrast with recent global record highs actionsThe digital asset lost 2.5% to trade around $56,870 as of 9:25 a.m. in Singapore on Friday, while smaller coins like Ether and XRP also suffered losses.
Cryptocurrency speculators currently face a number of challenges, including declining demand for Bitcoin USA exchange-traded funds, signs that governments are disposing of seized tokens, and the hard-to-parse impact of U.S. political flux.
In addition, administrators of the failed Mt. Gox exchange are returning a trove of bitcoin to creditors in phases. Speculators are unsure how much of the $8 billion haul will be sold. A wallet linked to Mt. Gox moved $2.7 billion of the token on Friday, according to Arkham Intelligence.
The correlation is fraying
In the meantime MSCI Inc.the caliber of global stocks are hovering near an all-time high, and a short-term, 30-day correlation between Bitcoin and the index is plummeting. The question is whether risk aversion to cryptocurrencies is isolated or heralds a cautious quarter for traditional investments as well after a strong first half for stocks.
“There’s just a general lack of excitement in the cryptocurrency markets right now,” said Stefan von Haenisch, head of trading at OSL SG Pte. “Most of the news that’s coming out at the moment, like the Mt. Gox sell-off, is more bearish in nature.”
Von Haenisch said cryptocurrencies need more dovish notes monetary policy from the Federal Reserve, adding that “a rate cut or two, coupled with the Fed’s balance sheet expansion, are two key ingredients that cryptocurrencies are really waiting for.”
Investors are looking to U.S. employment data later on Friday for the latest clues on the Fed’s policy outlook. Recent weak economic reports have strengthened the case that the U.S. central bank will ease monetary settings in the coming months.
Bitcoin hit an all-time high of $73,798 in March, buoyed by unexpectedly strong demand for the token’s inaugural U.S. ETF. Inflows have since slowed, dragging Bitcoin down and casting a shadow over the rest of the digital asset market.
The debut U.S. ETF for the No. 2 token Ether is pending approval, but interest in the products could be mixed if the crypto sell-off continues.
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