Bitcoin
Bitcoin Falls for Fourth Day Even as Global Stocks Hit Record Highs
(Bloomberg) — Bitcoin fell for a fourth straight trading session, part of a broader sell-off in cryptocurrencies that contrasted with recent record highs in global stocks.
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The digital asset fell 2.5% to trade at around $56,870 as of 9:25 a.m. Friday in Singapore, while smaller coins such as Ether and XRP also posted losses.
Cryptocurrency speculators currently face a number of challenges, including falling demand for U.S. Bitcoin exchange-traded funds, signs that governments are unloading seized tokens and the hard-to-parse impact of U.S. political flux.
Additionally, administrators of bankrupt exchange Mt. Gox are returning a stash of Bitcoin to creditors in stages. Speculators are unsure how much of the $8 billion worth will ultimately be sold. A wallet linked to Mt. Gox moved $2.7 billion of the token on Friday, according to Arkham Intelligence.
Correlation Misunderstandings
Meanwhile, MSCI Inc.’s global equity gauge is hovering near a record high and a short-term, 30-day correlation between Bitcoin and the index is plummeting. The question is whether the risk-off move to crypto is isolated or portends a circumspect quarter for traditional investments as well after a strong first half for stocks.
“There’s just a general lack of buzz in the crypto markets right now,” said Stefan von Haenisch, head of trading at OSL SG Pte. “Most of the news that’s being spread these days, for example the Mt. Gox selloff, is more bearish in nature.”
Von Haenisch said that the cryptocurrency needs a more dovish note on monetary policy from the Federal Reserve, adding that “a rate cut or two, coupled with an expansion of the Fed’s balance sheet, are two key ingredients that the cryptocurrency is really waiting for.”
Investors are looking ahead to U.S. jobs data later Friday for the latest clues on the outlook for Fed policy. Recent weak economic reports have bolstered the case for the U.S. central bank to ease monetary settings in the coming months.
Bitcoin hit an all-time high of $73,798 in March, driven by unexpectedly strong demand for the token’s inaugural U.S. ETFs. Inflows have since slowed, dragging Bitcoin lower and casting a shadow over the rest of the digital asset market.
Approvals for the debut U.S. ETFs for the second-ranked Ether token are pending, but interest in the products could be mixed if the cryptocurrency sell-off continues.
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