While ETF issuers tilted the supply-demand balance in BTC’s favor, whales offloaded BTC. Market intelligence platform Santiment stated:
“Key stakeholders with 10-10k BTC hold 13.68 million BTC, totalling 68.62% of all Bitcoin. Going into the last all-time high, they accumulated ~110,010 coins between Aug. 22 and Oct. 12. However, they have dumped ~23,200 coins since.”
The coming week could shift sentiment and demand for US BTC-spot ETFs. A continued US government shutdown, weak US economic indicators, and a hawkish Fed may fuel stagflation fears. Rising stagflation risks could weigh on risk assets such as BTC.
Conversely, a US Senate vote, passing a stopgap funding bill, could ease stagflation risks, shifting focus to the data and Fed speakers. A weaker labor market and dovish Fed rhetoric could boost BTC demand and expectations for Fed rate cuts, potentially driving higher private consumption.
JPMorgan economist Michael Feroli remarked on the potential economic impact of the shutdown, stating:
“Each week, a shutdown subtracts about 0.1% from annualized GDP growth via reduced government activity. There could be a sentiment channel as well if the duration of the shutdown enters uncharted territory.”
Feroli added that layoffs and actual job losses could intensify risks to the labor market and consumer spending, which accounts for roughly 65% of US GDP.
Notably, the USDA, which oversees the Supplemental Nutrition Assistance Program (SNAP), will run out of funds, leaving over 40 million Americans without food assistance, an economic headwind.
Bitcoin’s retreat weighed on demand for Ethereum (ETH).
While BTC’s losses weighed on cryptocurrencies, ETH-spot ETF issuers reported net inflows of $19.3 million in the reporting week ending October 31. Crucially, ETH-spot ETF issuers snapped a two-week outflow streak, cushioning ETH’s downside.
Nevertheless, recent price trends underscored BTC’s influence on the broader market. ETH has fallen 6.56% this week.
