Stocks rebound while cryptocurrencies dip on ETF fatigue 

Those expecting a run up in bitcoin’s price as spot bitcoin ETFs hit the market last week have been disappointed, but continued interest in the product should only be an upside, analysts say

article-image

Summer loveee/Shutterstock modified by Blockworks

share

Cryptocurrency prices slipped while equities recovered Thursday afternoon, led by a rally in tech stocks. 

Bitcoin was trading more than 4% lower Thursday over 24 hours, dipping below $41,000 for the first time in a month. If the cryptocurrency cannot rebound to $41,250, it will mark the lowest daily close since Dec. 11. Ether (ETH) was also down about 4% Thursday, hovering around $2,430, a low for the past seven days. 

Those expecting a run up in bitcoin’s (BTC) price as spot bitcoin ETFs hit the market last week have been disappointed. Bitcoin is now down more than 11% since the product’s first trading day. And, while spot bitcoin ETFs raked in net inflows of more than $1.2 billion in just four days, bitcoin trading volume on exchanges is on the decline, according to data from Bloomberg. 

Read more: BlackRock beats spot bitcoin ETF rivals in race to $1B assets

Analysts say there are a few reasons why what is generally accepted as a successful bitcoin ETF launch has not translated into the price of the cryptocurrency. There has been some “sell the news” action, Noelle Acheson, author of the “Crypto is Macro Now” newsletter, said. 

“We’re also seeing some rotation out of BTC into ETH, which has arguably been lagging behind and could be the next beneficiary of ETF speculation,” Acheson added. “This can be seen in the sharp drop in the BTC/ETH ratio.” 

Bitcoin ETFs became the second-largest ETF commodity in the US behind gold, showing that interest is strong and will only continue to grow for the asset class, Jag Kooner, Bitfinex Head of Derivatives, said. 

Read more: Bitcoin ETF Tracker

In stocks, growing skepticism that the Federal Reserve is in any hurry to cut rates had markets pulling back this week, but strong earnings reports, especially from the tech sector, are helping shares recover. The central bank’s Beige Book, released Wednesday, reported signs of a cooling labor market and relatively flat economic activity. 

The S&P 500 was up 0.9% while the Nasdaq Composite gained 1.4% Thursday, pushing both back into the green year-to-date after a rocky start to 2024. Analysts say the dip was expectedly short lived as investors digest the news that a soft landing is a real possibility. 

“Markets are currently navigating the tension between wanting to see lower interest rates and looking forward to a year when public company profitability finally improves,” Nicolas Colas, co-founder of DataTrek Research, said. “That is a healthy and common mid-cycle market narrative, not something which should engender caution or outright pessimism.”


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

Plus, a look into US spot BTC funds six months into trading

article-image

A Swedish energy-focused project named Srcful proposed to become a Helium subnetwork with its own ENERGY token

article-image

Securitize CEO Carlos Domingo thinks BUIDL will potentially hit its next $500 million milestone in just a few months

article-image

Representatives on Thursday opted to back President Biden and uphold his veto of the legislation that sought to invalidate SAB 121

article-image

The former Valkyrie CEO chats with Blockworks about what she has her eye on as Cypherpunk Holdings’ new leader

article-image

Thursday’s CPI report shows prices are coming down more quickly than analysts had anticipated, renewing hope that central bankers will cut rates in the fall