Bitcoin Faces Pressure Amid ETF Outflows and Geopolitical Tensions, Trading Around $61K

Bitcoin dropped to just over $60,000 on Thursday morning. This came after two days of outflows from U.S. spot Bitcoin ETFs. However, by the latest update, Bitcoin's price climbed back up to around $61,000. It’s trading flat for the day but is down 4.5% for the week, according to CoinGecko.

In a note to Decrypt, Standard Chartered shared some insights. They stated that Bitcoin doesn’t act as a safe-haven asset during current geopolitical tensions. They believe that if it dips below $60,000, it could be a good time to buy. Following a significant drop in the crypto market, alongside stocks due to Iran’s actions against Israel, Geoff Kendrick, the Global Head of Digital Assets Research at Standard Chartered, emphasized that Bitcoin shouldn't be seen as a hedge against geopolitical risks. Instead, it’s more of a hedge against traditional finance issues—like bank failures and concerns about the sustainability of U.S. Treasuries.

Kendrick noted, “Risk concerns related to the Middle East seem likely to push BTC below $60K before the weekend.” But he also pointed out some potential upsides. He mentioned increased activity in Bitcoin options markets and a “circularity” effect tied to U.S. presidential election odds as factors that could support prices.

“There has been a large fresh position in BTC options in the last couple of days,” Kendrick explained. He added, “The amount of open interest for the 27 December expiry at $80,000 on Deribit jumped by 1,300 BTC over the last two days. Positions like the $80,000 call options and the circularity regarding Trump probabilities suggest the dip should be bought into.”

On October 2, the market saw net outflows from Bitcoin spot ETFs totaling $91.7 million. Grayscale (GBTC) lost $27.3 million, while ARK (ARKB) experienced outflows of $60.2 million. On the other hand, Fidelity’s FBTC managed a net inflow of $21 million, according to SoSo Value data.

Ethereum spot ETFs reported net inflows of $14.4 million, with BlackRock’s (ETHA) receiving $18 million.

Alex Kuptsikevich, a senior market analyst at FxPro, attributed Bitcoin’s current stagnation to a broader risk-off sentiment in global markets. He pointed to the ongoing dollar gains and declines in risk assets due to the Middle Eastern conflict, along with profit-taking ahead of the U.S. jobs report.

“Bitcoin found support on the decline towards the 50-day moving average and the $60,000 area,” he said. “Over the next two days, swings within the $60,000 to $63,600 range could be misleading market noise as the market awaits new information.”

Ethereum’s volatility has been outpacing Bitcoin’s. The gap has been growing in recent months as traders prepare for the upcoming U.S. elections in November. Implied volatility for 30-day at-the-money Ethereum contracts relative to Bitcoin has widened to nearly 7%, according to Nick Forster, founder of the DeFi derivatives protocol Derive.

In a significant move, Franklin Templeton has expanded its blockchain fund to Aptos. The asset manager announced that its Nasdaq-listed On-Chain U.S. Government Money Fund (FOBXX) is now operating on Aptos. They described this transition as a “massive step in the right direction” toward creating a more decentralized and accessible financial future. Aptos is the blockchain behind APT, which is currently the 30th-largest digital coin by market cap. It was developed by part of the team behind Meta’s discontinued Diem project.

Monero has seen a nearly 7% drop over the last 24 hours following Kraken’s announcement about delisting it for European customers. Kraken, one of the oldest crypto exchanges, informed users that it will cease trading Monero for clients in the European Economic Area (EEA) due to regulatory changes. Trading and deposits for all Monero markets will halt on October 31 for EEA clients, and any open orders will be automatically closed. The deadline for withdrawing Monero is December 31, after which any remaining balances will be subject to closure.