Bitcoin falls for 4th day as global stocks hit record highs

Bitcoin has been on a downward trend for four consecutive trading days, and cryptocurrency selling is in sharp contrast to recent record highs for global stocks.
The digital asset was down 2.5% at around $56,870 in Singapore at 9:25 a.m. on Friday, with smaller coins like Ethereum and XRP also suffering losses. Cryptocurrency speculators are currently facing a range of challenges, including a drop in demand for U.S. Bitcoin exchange-traded funds (ETFs), signs that the government is disposing of seized tokens, and the elusive impact of political changes in the U.S.

In addition, the administrators of the failed Mt. Gox exchange are gradually returning bitcoin to creditors. Speculators are unsure how much of the $8 billion in profits will be sold. According to Arkham Intelligence, wallets linked to Mt. Gox moved $2.7 billion worth of tokens on Friday.

Correlation Frey

Meanwhile, MSCI Inc.’s global equity index is nearing a record high, and the short-term 30-day correlation between bitcoin and the index is plummeting. The question is whether risk aversion in crypto is isolated, or if it signals a cautious turn for mainstream investing after a strong first-half performance in stocks. “There’s a general lack of buzz in crypto right now,” said Stefan von Haenisch, head of trading at OSL SG Pte. “Most of the news that’s been going around right now, like the Mt. Gox selloff, is inherently more bearish.” Von Haenisch said crypto needs more dovish notes on monetary policy from the Federal Reserve, adding that “one or two more rate cuts and an expansion of the Fed’s balance sheet are the two key things that crypto is really waiting for.”

Bloomberg

Investors are waiting for the latest U.S. jobs data due later Friday for the latest clues about the Fed’s policy outlook. The latest weak economic report has bolstered arguments that the U.S. central bank should ease monetary policy in the coming months.

Bitcoin hit an all-time high of $73,798 in March, fueled by unexpectedly strong demand for U.S. ETFs for tokens. Since then, Bitcoin has fallen as inflows have waned, casting a shadow over the rest of the digital asset market.

While the U.S. debut ETF approval for the second-place token, Ethereum, is pending, interest in the product could be mixed if the cryptocurrency sell-off continues.