The crypto market currently lacks sufficient internal drivers for growth, and the escalating situation around the Strait of Hormuz could further worsen the outlook for crypto assets. This was stated by experts from Wintermute.
Demand for Bitcoin ETFs Did Not Hold
According to their data, from August 10 to 14, US spot Bitcoin ETFs recorded a net outflow of about $390 million. The BlackRock's IBIT fund lost the most capital. At the same time, Ethereum-based funds ended the week almost unchanged, breaking a five-week streak of capital inflows.
Wintermute believes the rapid reversal of flows indicates that part of the demand that emerged in early August may have been speculative. Signs of a sustained return of long-term investors are still insufficient.
"When an asset cannot rise on good news, while specialized funds are losing money, it indicates the return of sellers," analysts noted.
At the same time, certain altcoins demonstrated more resilient demand. Solana-based funds attracted about $10 million, the best result since May. Minor inflows were also recorded for products based on XRP and Hyperliquid.
Miners May Remain a Source of Pressure
Another factor that could restrain Bitcoin, Wintermute cites, is sales from miners. In particular, Riot Platforms reported selling 4,300 $BTC in the second quarter after selling 3,778 $BTC in the first. As a result, the company's reserves decreased to 11,380 $BTC.
The full cost of mining one Bitcoin at Riot was almost $91,000, while the market price of the asset was below $64,000. The company ended the quarter with a loss of $237 million.
Wintermute notes that the problem is not limited to Riot. Given the record hash rate, mining costs for some miners exceed the market price of the leading cryptocurrency. Therefore, they may sell accumulated coins to cover current expenses or finance a shift into other areas, particularly artificial intelligence infrastructure.
Thus, miners' reserves remain a potential source of additional supply on the market.
Macroeconomy Could Increase Pressure
At the same time, the main risk for the crypto market may currently lie outside the crypto industry itself. The July US Consumer Price Index rose 0.1% month-over-month, which matched forecasts. Weak data on retail sales and consumer sentiment lowered expectations for a Federal Reserve rate hike in September.
However, the positive effect for risk assets from this was limited. According to Wintermute's assessment, the problem may shift from monetary policy to energy prices.
Brent oil rose 7.91% over the week due to the escalating situation around the Strait of Hormuz. On Saturday, only five vessels passed through it, and on Sunday — none, whereas on the previous weekend this figure was 31 vessels.
Analysts warn that a further increase in oil prices could impact August inflation in the US. This, in turn, could reduce the likelihood of the Fed easing policy in September.
Wintermute in No Rush to Become Optimistic
The experts noted that last week they expected demand for ETFs and activity from companies accumulating cryptocurrencies on their balance sheets to persist until the end of summer. However, the market failed the first test: over five trading sessions, ETFs lost $390 million, and Bitcoin returned to the lower bound of its range.
At the same time, analysts are not switching to a negative forecast. In their opinion, market participants' positions remain moderate, so there are no grounds for an openly pessimistic view yet.
However, to restore a positive outlook, Wintermute wants to see stabilization of flows into Bitcoin ETFs or a sustained return of capital.
They named the nearest important events as the publication of the Fed meeting minutes on August 19, preliminary business activity indices on August 21, and the Jackson Hole Symposium on August 27-29. At the same time, the situation around the Strait of Hormuz may remain the main external factor for the market throughout the week.
Earlier, CryptoQuant experts spoke about a new phase of Bitcoin capitulation.
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