Concerns over rising inflation and flat spot Bitcoin ETF inflows could be factors in the $435 million outflow from crypto investment funds last week.from cryptocurrency investment products in the week ending April 26. Crypto exchange-traded products have now experienced outflows for the third consecutive week as Bitcoin price remains rangebound in the low $60,000 range.
Analysts at brokerage firm Bernstein say that the slowdown in spot Bitcoin ETF inflows is not the beginning of a negative trend but is a “short-term pause” before“We don’t expect the Bitcoin ETF slowdown to be a worrying trend, but believe it is a short-term pause before ETFs become more integrated with private bank platforms, wealth advisers and even more brokerage platforms.”
A new report by Ecoinometrics asks its readers to watch out for a pivot in the financial conditions that could “make or break the Bitcoin bull market.”“opened up a new source of demand,” turning macro winds and the failure of the U.S. Federal Reserve to control inflation could trouble the bull market.
According to Ecoinometrics, the Federal Reserve Bank of Chicago’s National Financial Conditions Index , which measures the level of tightness in the U.S. financial system, is stalling and is at the same level it was in 2022 when the rates started hiking.As the chart above reveals, the NFCI is stalling, which is a possible explanation for why risk assets, such as Bitcoin, are bearish, Econometrics explained.