Bitcoin (BTC) rotary funds (ETFS) were a significant pressure among the uncertainty caused by the ongoing global trade war. According to Farside Investors Investors, between March 28 and April 8, these ETF experienced net drains with a total value of $ 595 million. In particular, even after most American import tariffs were temporarily abolished on April 9, the funds still recorded an additional $ 127 million net outflows.
This situation meant that traders questioned the causes of continuous outflows and why Bitcoin’s Rally to USD 82,000 on April 9 did not raise trust among ETF investors.
Special net flow of ETF ETF. Source: Farside Investors
Corporate credit risk may be to draw investors from BTC
One of the factors contributing to reduced interest is the growing probability of economic recession. “You can clearly observe that the liquidity on the credit side has dried up”, Michael Weidner Michael Weidner he said Reuters. Basically, investors change in the direction of safer assets, such as government bonds and cash resources, which can ultimately lead to a credit crisis.
Credit coverage is a pointed decrease in the availability of a loan, which leads to a reduction in business investments and consumer expenditure. This can happen regardless of the profitability of the US Treasury, because increased perception of the risk of the borrower can independently reduce credit.
The RW Baird strategist, Ross Mayfield, noted that even if the US Federal Reserve decides to lower interest rates to stabilize turbulent markets, each relief for companies can be miniature -lived.
Mayfield reportedly stated: “In the stagphic environment from the tariffs you will see that both investment borrowers and highly gained corporate borrowers are fighting with the increase in debt costs.” Despite the 10-year level of the US Treasury profitability compared to the previous month, the appetite for corporate debt remains delicate.
ICE Bank of America Corporate Index corrected with the option. Source: Tradingview / Cointelegraph
Dan Krileter, strategy director of a constant income at BMO Capital Markets, he said Reuters, that the spades of corporate bonds have experienced the largest weekly expansion since the regional banking crisis in March 2023. Spread of corporate bonds measures the difference in interest rates between corporate bonds and government bonds, reflecting the additional risk that investors take when lending to companies.
Related: BitWise doubles the Bitcoin price forecast worth PLN 200,000 USD due to commercial voltage
The trade war occupies a central place, limiting the interest of BTC investors
Investors remain concerned that even if the US Federal Reserve lowers interest rates, it may not be enough to restore confidence in the economy. This sentiment also explains why the American consumer price rate (CPI) in March – at 2.8%, its slowest annual raise in four years – to positively affect the stock markets. “This is the last clean print that we will see before we get an increase in inflation caused by a tariff,” Joe Brusaulas, RSM chief economist, he said Yahoo Finance.
It seems that traders are waiting for stabilization on the corporate bond market before they regain confidence in the influx of ETF Bitcoin. As long as the risk of recession will remain increased, investors will probably favor safer assets, such as government bonds and cash resources. Trying this correlation would require a change in perception towards constant monetary policy and censorship resistance. However, potential catalysts of such a change remain unclear and may last months and even years.
This article is used for general information purposes and should not be and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are themselves and do not necessarily reflect or represent the views and opinions of Cointelegraph.
