Bitcoin Drops 4% Despite Rallying Markets as Spot ETF Hopes Fade

Bitcoin prices dropped 4% on Tuesday to around $35,000 despite a strong rally in traditional markets fueled by slowing inflation. The divergence highlights fading enthusiasm around the potential approval of a spot bitcoin exchange-traded fund (ETF) this week.

Major stock indexes like the Nasdaq and S&P 500 gained over 1.5% as October’s flat Bitcoin fell 4% to $35K even as stocks surged on cooling inflation, potentially due to waning optimism around an imminent spot BTC ETF approval. Consumer Price Index (CPI) print sparked hopes that the Federal Reserve could soon pause interest rate hikes. But Bitcoin failed to follow suit, sinking from $36,600 to as low as $34,970 amid profit-taking.

The declining crypto prices come ahead of the Securities and Exchange Commission’s (SEC) deadline on Friday to approve or deny spot Bitcoin ETF filings from Hashdex and Franklin Templeton. After previous delays, hopes for near-term approval are fading.

Despite Bitcoin’s pullback, slowing inflation and falling bond yields could still provide tailwinds for crypto prices, Grayscale Investments noted. But the firm said progress on spot ETF approvals is needed for the recovery in digital asset valuations to continue.

For now, Bitcoin’s divergence from surging traditional markets highlights concerns that speculators are losing faith in a spot ETF green light anytime soon. However, analysts say underlying bullish factors remain in place to restart Bitcoin’s rally once regulatory clarity improves.

#Bitcoin #Crypto #ETF #Markets

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