Bitcoin, Ether, XRP, Dogecoin Lag a Nine-Week Stocks Rally as ETF Demand Cools

💡 Cryptocurrencies are trailing a nine-week rally in US stocks as demand for exchange-traded funds cools.

The crypto market has been struggling to keep pace with the recent rally in US stocks, with Bitcoin, Ether, XRP, and Dogecoin all falling behind a nine-week surge in equities.

Cryptocurrency Market Underperforms US Stocks

The crypto market has been underperforming US stocks for several weeks, with the S&P 500 index up 9.1% over the past nine weeks, while Bitcoin has rallied just 5.5% over the same period. The lagging performance of cryptocurrencies is particularly notable given the recent surge in demand for exchange-traded funds (ETFs).

ETF Demand Cools

ETF demand has been a key driver of the recent rally in US stocks, with investors pouring money into ETFs tracking the S&P 500 and other major indices. However, demand for these ETFs has cooled in recent weeks, which may be contributing to the underperformance of cryptocurrencies. The $SPY ETF, which tracks the S&P 500, has seen outflows of $1.3 billion over the past week, while the $BTC ETF has seen inflows of just $100 million.

Institutional Investors Flee Crypto

Institutional investors have been fleeing the crypto market in recent weeks, with many major players reducing their exposure to cryptocurrencies. This shift in sentiment has been driven by concerns over the regulatory environment and the lack of clear guidance on the treatment of cryptocurrencies as assets. The $BTC price has fallen by 10% over the past week, while the $ETH price has fallen by 12%.

What It Means for Investors