Bitcoin fell below $82,000 in Asian trading Friday as renewed selling across global markets weighed on cryptocurrencies, while US spot Bitcoin exchange-traded funds recorded $635 million in outflows.
Bitcoin was down 1.3% at $81,623 at the time of writing, extending losses after a sharp sell-off in US equities on Thursday.
The decline followed three consecutive sessions of positive flows into US spot Bitcoin ETFs, highlighting a reversal in institutional demand.
The broader market has come under pressure as escalating tensions in the Middle East drive oil prices higher and revive concerns about inflation.
With US midterm elections less than two weeks away, investors are also reassessing the potential implications for interest rates and financial conditions.
ETF outflows interrupt buying streak
US spot Bitcoin ETFs recorded over $635 million in net outflows on Thursday, ending a three-day streak of positive flows.
The reversal came after institutional demand had started to recover.
US-listed spot Bitcoin ETFs have attracted approximately $1.1 billion in net inflows so far this week, recouping some of the $909.6 million in outflows recorded over the previous two weeks.
The figures suggest that Thursday’s withdrawals interrupted a broader recovery in ETF demand rather than eliminating the week’s net inflows.
Sustained buying through these funds has been an important source of demand for Bitcoin.
A prolonged reversal in flows could make it harder for the cryptocurrency to regain upward momentum, particularly if broader financial markets remain under pressure.
Bitcoin has already fallen roughly one-third from its all-time high above $126,000 a year ago.
Its recovery since August has raised hopes that prices could return to $100,000 this year, but recent volatility has tempered those expectations.
Technology sell-off weighs on risk appetite
Thursday’s decline in Bitcoin coincided with a sharp drop in US equities, particularly technology and semiconductor stocks.
The Nasdaq Composite fell 2.6%, while the S&P 500 declined 1.2%.
The Philadelphia Semiconductor Index, which tracks US-listed chipmakers, dropped 6.7%.
Nvidia shares fell 4.4%, while Meta Platforms dropped 7% despite reporting stronger-than-expected revenue.
Investors remained concerned about Meta’s rising AI spending and its plans to issue new shares to support expansion.
SpaceX shares declined 9%, while Tesla fell 3%, despite positive third-quarter earnings developments.
The market reaction points to growing scrutiny of the cost of building AI infrastructure.
Strong demand for AI technology has supported technology valuations, but investors are increasingly focused on the capital requirements and financing needed to sustain that expansion.
The pullback in technology shares has also added pressure to cryptocurrencies, which can face selling when investors reduce exposure to risk-sensitive assets.
Oil prices and Iran tensions add uncertainty
Geopolitical developments have added another source of pressure.
Brent crude climbed 3.7% to $112 a barrel as concerns about a further escalation in the conflict involving the United States and Iran raised fears of supply-chain disruptions.
Higher oil prices can feed into inflation, potentially complicating the outlook for interest rates.
A more persistent inflation problem could limit the scope for monetary easing and weigh on assets that tend to benefit from easier financial conditions.
The approaching US midterm elections add another layer of uncertainty as investors assess the economic and political implications of the conflict.
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