Bitcoin ETF Price/Flow Correlation Is Declining: JPMorgan

The correlation reached as high as 0.84 in January, based on estimates from JPMorgan, but it has since slowed.

AccessTimeIconFeb 22, 2024 at 8:32 p.m. UTC
Updated Mar 8, 2024 at 10:03 p.m. UTC
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The price of bitcoin (BTC) has not been moving as closely in relation to flows in and out of the spot ETFs as it previously did, according to JPMorgan.

On Wednesday, the correlation between the two asset classes dropped to 0.60, said analyst Ken Worthington in a note Thursday morning to the bank's clients. That's down from 0.78 on Feb 7., said Worthington, and from as high as 0.84 on Jan. 31.

Worthington said a number above 0.70 is considered "highly correlated," and just below would be "moderately correlated."

Source: JPMorgan estimates and Bloomberg Finance L.P.
Source: JPMorgan estimates and Bloomberg Finance L.P.

Inflows accelerated last week when investors poured a record $2.4 billion into the funds, the largest amount in their short history. The inflows continue to be dominated by BlackRock’s IBIT and Fidelity’s FBTC, which to this point have garnered nearly $11 billion in AUM.

For now, it appears that flows are following price, with bitcoin's sharp gains in early February leading to a jump in money going into the ETFs. The leveling in price of the last few sessions has may have been the trigger for softer inflows into the funds.

Edited by Stephen Alpher.

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Helene Braun

Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.


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