Posted by Xoken.org – The most valuable crypto digital asset in the world, Bitcoin, weakened 6%, bringing it to the level of US$66,364.69 (around Rp. 1.04 billion). The decline in demand for Spot ETFs is still ongoing and the Fed’s signal is driving the weakening.
Bitcoin’s weekly movement indicator was ‘red’ until Thursday (4/4/2024) afternoon at 17:50 Indonesian time and has not yet returned to its best position in history at US$73,798 which was recorded in the second week of March.
This digital gold still achieved a slight increase of 0.2% compared to an hour ago, and 0.4% on a daily scale.
The weakening that DACM co-founder Richard Galvin continues to observe, the effect of the Fed’s interest rate cut bets is also starting to loosen. The impact was that Treasury yields and the dollar strengthened.
This makes it increasingly difficult for the digital asset industry to grow, because it is known to be the most speculative market. “The Fed’s view has an impact on all crypto assets, where there has been a sell-off in the week,” said Stefan von Haenisch, head of trading at OSL SG Pte at the start of the week.
The spot-Bitcoin ETF suffered its worst drop in a month on Wednesday morning as fund flow figures showed that investors withdrew their funds. Bitcoin was little changed at around US$66,000 on Wednesday.
A number of Bitcoin ETFs launched on January 11 in America (US), have so far attracted US$12 billion in funds. Inflows peaked in the first half of March, when Bitcoin surged to a record high. The sector has experienced outflows since then and the token is down around 11% from its peak.
These fund flow trends provide insight into how movements in Asia “were very strong in February and early March, but less strong in March,” Tang said. Coinglass data notes about $354 million in bullish crypto bets were liquidated on Tuesday, the most in about two weeks.
About 5.5% of bitcoin is held in the ETF sector overall, compared to 1% for gold, ByteTree Asset Management Chief Investment Officer (CIO) Charlie Morris wrote. “Therefore, ETF flows are more important for Bitcoin than gold,” he said.
Quant Strategy for Bitcoin Investment
The trend-following quant strategy is very suitable and profitable to apply to Bitcoin, which is known for its price ups and downs. This has been echoed by quantitative hedge-fund investors and a number of academic researchers.
Quants are a better strategy to capture rally momentum, while also profiting from large drawdowns. Quant is better than playing the pattern of buying and then holding for a long period of time.
Florin Court Capital LLC managed US$2 billion has been implementing the strategy since 2017 and the crypto exposure has increased trading following rokokbet trends across their assets. For retail traders, the newly launched ETF offers broader access to strategies that capitalize on Bitcoin’s movements.
“Risk-adjusted returns from momentum-type strategies, regardless of speed, have historically been better than buy-and-hold strategies,” said Tarek Abou Zeid, partner and portfolio manager at Man AHL.
“Following trends is about extracting behavioral biases. In crypto, you see excess, you see FOMO, you see panic – that can be captured with those systematic strategies.”
Researchers at AHL Man Group’s Man unit found that long-short proxy trend strategies in Bitcoin and Ether have outperformed buy-and-hold investments in the coins since 2017 when scaled for 10% volatility. This strategy captures profits during rallies and takes short positions when the trend is negative.
Man Group, whose assets under management rose to a record $167.5 billion by the end of 2023, previously said the firm traded cryptocurrencies as part of its existing strategy. Quantitative investment giant AQR Capital Management LLC has also publicly said that it trades cryptocurrency futures with a trend-following strategy.
Bitcoin Cash Reduces Supply
Cryptocurrency Bitcoin Cash reduced the supply of newly minted tokens by 50% on Wednesday, ahead of the halving momentum that occurred at the end of April.
Bitcoin Cash split from Bitcoin in 2017. It started the so-called forking craze, where dozens of software development teams attempted to create ‘money out of thin air’ by changing the original computer code and releasing coins with “Bitcoin” in their name.
Bitcoin Cash supporters include Roger Ver, known as Bitcoin Jesus in the early days of crypto, for supporting Bitcoin—before switching his allegiance to Bitcoin Cash.
Bitcoin Cash rose as much as 11.4% to US$632 on Thursday, rebounding from a sell-off in the previous session. The token is still far below its all-time high of US$4,355 set in 2017, according to CoinMarketCap data.