The launch of Bitcoin exchange-traded funds (ETFs) in the US market has caused a break in the correlation between the leading cryptocurrency and the S&P 500 index, which measures the performance of the top US stocks. This was observed by Arthur Hayes, the co-founder of BitMEX, a popular crypto derivatives platform.
Hayes shared his views on social media platform X (formerly Twitter), where he posted a chart showing the contrasting price movements of Bitcoin and the S&P 500. He said that the decoupling of the two assets suggests that they have different outlooks for the future. He also hinted at some potential problems ahead for the US dollar, saying: “BTC is telling us that there are hiccups ahead for $.”
Hayes added that the next indicator to watch out for is the expected release of the US Treasury refunding announcement on Jan 31. He implied that this could have a significant impact on the market sentiment and the direction of Bitcoin.
Bitcoin ETFs Attract Investors, But Fail To Boost Price
The Bitcoin ETFs, which were approved by the US Securities and Exchange Commission (SEC) on Jan 11, were met with high demand from investors. Two of the ETFs, which track the spot price of Bitcoin, amassed over a billion dollars in assets under management within a week, as reported earlier.
The introduction of ETFs, viewed as a major milestone for the crypto industry, did not positively affect the price of Bitcoin. Instead, the cryptocurrency experienced a sharp drop in value, erasing the gains it had made in the previous weeks. As of this writing, BTC is trading at $40,633, according to data from CoinMarketCap.
Analysts had predicted that the ETFs would boost the price of Bitcoin, as they would increase its exposure and adoption among mainstream investors. However, the opposite seems to have happened, as BTC failed to sustain its momentum and fell into a bearish zone.
Nevertheless, some analysts remain optimistic that Bitcoin will recover and reach new highs before the end of the year. They believe that the ETFs will continue to attract more capital inflows and that the fundamentals of Bitcoin are still strong. Some have even forecasted that BTC will hit $100K by the end of 2024.
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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.
