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Bitcoin
BusinessBanking & Finance

Bitcoin, ether stabilise after last week’s nosedive from the cool-off in US hype of exchange-traded funds tied to cryptocurrency

  • Bitcoin lost 10.7 per cent in value last week
  • Ether moved up 0.8 per cent to US$1,683 but remained 8.5 per cent lower for the past seven days

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Bitcoin edged up 0.3 per cent in the last 24 hours to US$26,178 as of 07:30am in Hong Kong, logging a weekly loss of 10.7 per cent, according to CoinMarketCap data. The world’s leading cryptocurrency hit a two-month low of US$25,409 on Friday, but held position above the US$26,000 support level over the weekend.
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A cool-off of bitcoin exchange-traded fund (ETF) hype in the US could be behind the retreat of the token. That is the view of James Butterfill, head of research at European alternative asset manager CoinShares.

“The surge in June, spurred by BlackRock’s application for SEC approval of a bitcoin ETF, led to a noticeable spike in prices,” said Butterfill in a report released Friday.

“However, markets are now coming to terms with the realisation that an immediate SEC approval for a bitcoin ETF in the US is unlikely. It’s noteworthy that current bitcoin prices have stabilised around levels observed before this announcement,” he added.

The low volume and volatility in bitcoin, a rise in US treasury yields, as well as concerns over China’s ailing economy contributed to Bitcoin’s sharp weekly decline, the CoinShares report found.

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“The outlook for the markets in the forthcoming months presents a blend of opportunities and challenges. It’s anticipated that the US Federal Reserve will refrain from hiking rates further in September,” Butterfill said.

A dovish shift in Fed policy could provide a boost to Bitcoin’s prospects, he added.

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