[AI x Finance] What happens to Bitcoin with interest rate hikes? $680 million outflow from ETFs, Ethereum for 9 consecutive days

Conclusion: Bitcoin struggled due to a combination of interest rate hike expectations and capital outflows.

This week, Bitcoin traded down about 2% in the $82,000 range. $681.1 million flowed out of U.S. spot Bitcoin ETFs in one week, ending a three-week streak of inflows. Amid expectations that interest rate hikes will continue, capital from institutional investors and others that had been entering through ETFs is pulling back.

Price movement this week: Ethereum’s decline is larger

Comparing daily data from CoinGecko at 9:00 AM JST on Saturday, Bitcoin fell from $84,743 on October 4 to $82,918 on the 11th. The decline rate is approximately 2.2%. CoinDesk also reported it at around $83,000 as of the 8th.

Ethereum’s decline is even greater. During the same period, it fell from $2,687 to $2,504, a drop of about 6.8%.

Where did the capital exit from?

ETFs are products that allow investment in assets like Bitcoin from brokerage accounts. Because they often reflect the movements of large amounts of money from asset managers and pension funds, they are watched as a barometer for market sentiment. According to data aggregator SoSoValue (The Block, as of the 10th), the flow of funds in U.S. spot ETFs this week is as follows:

• Bitcoin ETFs: $681.1 million in outflows. The three-week streak of inflows was broken. According to CoinDesk, $487.1 million flowed out on the 7th alone.

• Ethereum ETFs: $542.1 million in outflows. This was the worst week since January. Outflows have continued for 9 business days since September 29, totaling $697.2 million.

• Solana ETFs: The 14-week streak of inflows stopped, with $24.8 million in outflows.

It was a week where capital pulled out of not just Bitcoin, but crypto ETFs as a whole.

Background: When interest rates are high, non-interest-bearing assets tend to be at a disadvantage.

According to the U.S. Treasury, the 10-year Treasury yield hit 5.31% on the 5th. Federal Reserve Governor Waller stated on the 8th that if the data holds as expected, he anticipates further interest rate hikes (for details, see the previous article).

There is a view in the market that when interest rates are high on assets like government bonds, non-interest-bearing crypto assets tend to look less attractive. This week’s ETF outflows align with this perspective.

Points to watch next week

First is the September CPI (Consumer Price Index) to be announced on October 14. The CPI is one of the central factors for the Fed in deciding on interest rate hikes; if inflation is strong, expectations for rate hikes will strengthen further, which tends to be a headwind for crypto assets. Second is the daily inflow/outflow of ETFs. Whether the outflows stop will be a gauge for whether capital is returning. Third is the FOMC on October 27-28.

For those who are dollar-cost averaging, it is worth keeping an eye on both ‘interest rates’ and ‘ETF capital flows,’ not just the price. For those holding in yen on Japanese exchanges, the movement of the dollar-yen exchange rate is also added to this.

*This article is for informational purposes only and does not constitute investment advice.

Source

English summary (Conclusion first)
Conclusion: With rate-hike expectations rising, bitcoin stalled this week, slipping about 2% to the $82,000 range as money left U.S. spot ETFs. According to SoSoValue data reported by The Block, spot bitcoin ETFs saw $681.1 million in weekly outflows, ending a three-week inflow streak, while ether ETFs lost $542.1 million, their worst week since January, extending a nine-day outflow streak. Ether fell about 6.8%, more than bitcoin. Next week, watch the September CPI on October 14, daily ETF flows, and the FOMC on October 27–28.

Korean summary (Conclusion first)
Conclusion: With rate-hike expectations rising, bitcoin stalled this week, slipping about 2% to the $82,000 range as money left U.S. spot ETFs. According to SoSoValue data reported by The Block, spot bitcoin ETFs saw $681.1 million in weekly outflows, ending a three-week inflow streak, while ether ETFs lost $542.1 million, their worst week since January, extending a nine-day outflow streak. Ether fell about 6.8%, more than bitcoin. Next week, watch the September CPI on October 14, daily ETF flows, and the FOMC on October 27–28.