4 Factors Helping Bitcoin to Decouple From Falling Stock Market

Photo from Cointelegraph

Read the full article by Omkar Godbole here

Start-of-the-month price rallies are driven primarily by untrackable fund flows, one fund manager said.

Inflation hedge:

“Inflation is here to stay, and every household is starting to see prices skyrocket for goods and services nationwide,” Carlos Betancourt, co-founder of BKCoin Capital, said. The article also stated “A recently released New York Federal Reserve survey showed year-ahead inflation expectations increased for the 10th straight month to 5.2% in August.”

Bitcoin is a store of value with a supply that will never be subject to change. Cryptocurrency is making it possible for people that live in countries like Venezuela with inflation rates that make it impossible to keep up with the cost of living.

In 2019 Venezuela’s inflation rate hit a record high of 344509.50%, making it nearly impossible for the citizens to even buy a coffee.

Lebanon’s inflation has skyrocketed in the past two years as the country’s financial and economic crisis spirals out of control, with politicians doing very little to mitigate its impact. The currency has lost nearly 90% of its value and plunged three quarters of residents into poverty.
Institutional flows

It’s safe to say that the big fish are coming into the space. “New quarterly months have typically seen a lot of new fund inflows into the ecosystem,” Shiliang Tang, chief investment officer of crypto hedge fund LedgerPrime told CoinDesk in a Telegram chat. “So funds need to put capital to work, which has helped in this case.”

“A few funds we’ve spoken to have seen very strong new capital inflows this quarter,” Tang said. Data from ByteTree Asset Management shows European and Canadian exchange trade funds (ETFs) and U.S. and Canadian closed-ended funds have accumulated over 3,000 bitcoin in the past four weeks.

Seasonality

“Seasonality could be a self-fulfilling prophecy to some extent,” BKCoin’s Betancourt said. “However, particularly regarding crypto, the recent news flow is definitely [the primary] driver over historical charts.”

ETF speculation

The Decision of U.S SEC chair Gary Gensler makes about whether to go forward with Bitcoin and Ethereum ETFs. Canada in fact has approved of both BTC and ETH ETFs, the SEC is reportedly reviewing over 20 applications pertaining to ETFS and future ETF products involving both ETH and BTC. However, the SEC has not insinuated a decision on any of these financial instruments will be made in the near future, although that narrative may be subject to change rather quickly.