Bitcoin prices are experiencing sharp fluctuations, with the influence of ETF buyers on the rise
The sharp fluctuations in the price of Bitcoin indicate that the influence of ETF buyers on crypto assets is increasing. Last week, the U.S. non-farm payroll report led to a rise in market expectations of a Fed rate cut, increasing the attractiveness of risk assets such as Bitcoin. The price fluctuations of Bitcoin are more in line with the views of traditional investors. In addition, the new developments in Bitcoin ETFs have attracted participation from Wall Street, aligning Bitcoin trading with other risk assets. The price of Bitcoin rose by about 7% on May 3, driving up other cryptocurrencies. However, concerns among investors about maintaining high interest rates led to the withdrawal of funds from Bitcoin spot ETFs. The price fluctuations of Bitcoin may reflect some risks in the global macro environment
According to the VESYNC Financial APP, the soft US April non-farm payroll report last Friday raised market expectations of a Fed rate cut and increased the attractiveness of risk assets including Bitcoin. As a result, Bitcoin rose last Friday, erasing most of the earlier losses from earlier in the week - as the market was concerned about the Fed's increasingly hawkish stance and fading demand for Bitcoin spot ETFs.
The sharp price fluctuations of Bitcoin last week seem to align more with the views of traditional investors, indicating that the influence of ETF buyers on this crypto asset is growing. FRNT Financial CEO Stéphane Ouellette stated last week: "The situation this week tells us that the new developments in Bitcoin ETFs have essentially opened up Wall Street's participation in the Bitcoin market in a way we have never seen before. Previously, Bitcoin had no clear correlation with other asset classes. However, this week, especially the sell-off on Tuesday night before the Fed policy meeting, shows that Bitcoin trading is consistent with other risk assets, which is very evident."
Data shows that Bitcoin rose by about 7% on May 3rd to $62,937, driving up prices of smaller cryptocurrencies like Ethereum, Solana, and even meme coins like Dogecoin. On May 1st, Bitcoin fell to $56,527, the lowest level in about two months.
Due to concerns about interest rates remaining high for a longer period, investors withdrew a net $564 million from 12 Bitcoin spot ETFs last Wednesday, the largest outflow since the approval of Bitcoin spot ETFs in January. Bitcoin's drop from the record high of nearly $7.4 trillion in March indicates concerns from some traders who "may see some risks in the global macro environment that the Fed or ordinary investors have not yet seen."