(Bloomberg) — Stocks and bonds outperformed Bitcoin this quarter, raising the possibility that a crypto boom is ending.
Global stock gauges, fixed income and commodities are all ahead of the biggest digital asset, which has fallen about 5% since the start of April as of 1.15pm on Friday in Singapore. Ari also showed him a pair of clean heels.
Bitcoin pulled back after setting a record high of $73,798 in March, and gains toward the peak have repeatedly fallen. Developments that previously excited animal spirits now attempt to do so, such as inflows into US Bitcoin exchange-traded funds or optimism over eventual Federal Reserve interest rate cuts.
ABOUT Noelle Acheson, author of the Crypto Is Macro Now newsletter, a portion of the subscriptions to the five-month US ETFs may be from existing Bitcoin holders. “In other words, not all ETF inflows represent new money coming into the market, and only new money will move the price,” she wrote.
JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou also explored the nature of demand for the products, which have attracted about $15 billion in net inflows to date, according to data compiled by Bloomberg.
They said “there has likely been a significant rotation away from digital wallets on exchanges to new spot-Bitcoin ETFs.” Stripping that out, they estimate this year's net inflows into crypto — including ETFs, fundraising from venture capital portfolios, and the “momentum” implied by CME Group futures — at $12 billion.
The 'skeptical' strategists
That's down from about $45 billion in 2021 and roughly $40 billion in 2022, the strategists wrote in a note, adding that they are “skeptical” that the current 2024 pace of inflows will continue for the rest of the year.
Bitcoin changed hands at $66,750 as of 1:15 p.m. Friday in Singapore. It has quadrupled since the start of last year in a rebound from a deep bull market in 2022. The token's biggest backers argue prices of $100,000 or more will materialize in time, while critics say crypto is no intrinsic value.
Bitcoin rose 67% in the three months to March, well ahead of traditional asset indices. This quarter, Bloomberg gauges of global bonds, stocks and commodities range from broadly flat to over 5%, enough to overtake Bitcoin.
Selling by Bitcoin miners to face tougher circumstances could be another factor behind the token's recent crash, Acheson said. Miners receive the token as a reward for running the powerful computers that support the digital ledger. Bounties are halved every four years and the latest cut in April created a more challenging backdrop for mining businesses.
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