Summary

  • After Nvidia CEO Jensen Huang’s resignation, Bitcoin prices weakened alongside US stocks and fell into the 90 million won range for the first time in three months.
  • Six straight trading days of outflows from US-listed spot Bitcoin ETFs totaling about $1.4856 billion accelerated the price decline.
  • The Fear & Greed Index fell to 20, in the “extreme fear” zone, and Bitcoin could face further declines amid high interest rate pressure and rising oil prices.

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US Risk Appetite for Risk Assets Cools

Spot Bitcoin ETFs See $1.4856 Billion in Outflows Over Six Days

This article was published on Hankyung Premium 9, the Korea Economic Daily’s paid investment platform. More investment stories are available to subscribers at Hankyung Premium 9 (www.hankyung.com/premium9).

Bitcoin weakened alongside US stocks after Nvidia Chief Executive Officer Jensen Huang stepped down, rattling investor sentiment. Large amounts of institutional money are also flowing out of Bitcoin overseas.

According to Upbit on Nov. 13, Bitcoin was trading at 96.59 million won, or about $69,700, as of 9 a.m. That was down 3.74% from a day earlier. It was the first time in about three months, since August, that the 9 a.m. closing price had fallen into the 90 million won range. Weakness also persisted overseas. Bitcoin was trading in the $68,000 range as of 3 p.m., according to CoinMarketCap. It was the first time since August that the cryptocurrency had fallen below $70,000.

The decline was driven by several factors. One was a broader cooling in US investment sentiment, which had been concentrated in artificial intelligence, after news emerged that Huang would step down from management over an affair. Appetite for risk assets such as cryptocurrencies also weakened. On Nov. 12, the Dow Jones Industrial Average closed down 189.4 points, or 0.36%, at 52,297.09 on the New York Stock Exchange.

Large institutional outflows also accelerated Bitcoin’s decline. According to investment platform Farside Investors, 12 US-listed spot Bitcoin exchange-traded funds posted net outflows for six straight trading sessions from Nov. 5 to Nov. 12. A total of $1.4856 billion flowed out during that period. On Nov. 11 alone, net outflows reached $299.8 million.

Investor sentiment toward Bitcoin also froze sharply. The Fear & Greed Index compiled by digital-asset data firm Alternative stood at 20 on the day, placing it in the “extreme fear” zone. The closer the reading is to zero, the stronger the selling pressure investors are facing. The index had moved in the “fear” range of 28 to 32 for one week from Nov. 6, but sentiment deteriorated rapidly.

Bitcoin could face further declines as macroeconomic variables such as high interest rates and rising oil prices persist. Yoon Seung-sik, head of research at Tiger Research, said Bitcoin’s drop was driven by growing uncertainty in a stock market led by AI shares. After a steady recent decline, he added, the market now needs to be watched for how much price support emerges.

Park Si-on, Korea Economic Daily reporter [email protected]

Korea Economic Daily