Concerns about potential disruptions in oil supply from the Middle East and the risk of U.S.-Israeli military actions against Iran have pushed oil prices higher. Brent crude reached its highest closing price since April 29.
- Bitcoin fell back toward the $80,000 mark on Saturday, more than a month after surpassing that threshold.
- On Thursday, U.S. spot Bitcoin ETFs recorded losses exceeding $635 million, with an additional $137.94 million lost on Friday, as reported by SoSoValue.
- Alex Thorn from Galaxy expressed strong optimism that the cryptocurrency sector will pivot back to decentralization.
The price of Bitcoin (BTC) dipped to about $80,000 on Saturday, a level it last witnessed in September, as U.S. spot Bitcoin ETFs faced significant losses exceeding $635 million on Thursday.
This decline occurred as investors showed strong selling behavior towards U.S. spot Bitcoin ETFs, resulting in net outflows of over $635 million on Thursday, based on data from SoSoValue. This figure nearly matched the $681 million lost by the funds during the full week ending October 9.
Further data from SoSoValue indicated that these outflows were almost three times the $229 million recorded the previous week.
Bitcoin’s price hovered around $80,500, reflecting a decline of over 1% within a 24-hour period at the time of writing. This drop returned the price to a level last seen in mid-September, specifically around the $80,000 range on the 18th.
Sentiment surrounding BTC among retail investors on Stocktwits remained in the ‘bearish’ category, while discussions remained subdued over the last day.
Rising Oil Prices Increase Market Pressure
Bitcoin’s downturn coincided with a surge in oil prices, with Brent crude climbing more than 3% on Friday to close at $116.72 per barrel, marking its highest closing price since April. Elevated oil prices have heightened inflation concerns on Wall Street.
Fresh reports suggesting that the U.S. and Israel might be gearing up for new military operations against Iran have reignited geopolitical anxieties. According to the CME FedWatch tool, market participants are currently pricing in a 90% likelihood that the Federal Reserve will maintain interest rates between 375-400 basis points at its upcoming meeting, with a 10% probability of a hike to a range between 400 and 425 basis points for the Federal Reserve’s meeting scheduled for October 27 to 28.
Meanwhile, analyst Darkfost from CryptoQuant noted that oil prices do not directly influence Bitcoin.
According to him, the greater challenge stems from the economic pressures that high oil prices create. He pointed out that Bitcoin’s momentum has historically slowed when Brent consistently trades above its annual average.
Thorn Predicts a Shift Back to Decentralization
In a recent appearance on Galaxy’s “Galaxy Brains” podcast, Thorn shared a long-term perspective, characterizing the crypto world as oscillating between “the suits,” referring to banks and financial institutions that adopt blockchain technology while distancing themselves from Bitcoin, and “the cypherpunks,” who advocate for decentralized finance.
Thorn indicated that, although the financial institutions currently hold sway, this has happened in the past as well. Back in 2015 and 2016, banks promoted “blockchain not Bitcoin” and developed private networks, but “ultimately, none of those initiatives truly succeeded.” He observed that the industry has a history of swinging back. “I’ve witnessed this pendulum shift several times,” he remarked. “And I am quite confident it will happen again.”
He encouraged Bitcoin investors not to lose hope, assuring them that “Bitcoin is here to stay.” While there are uncertainties, Thorn expressed that it appears “fairly likely” the low of around $58,000 that Bitcoin reached in June signifies the bottom of the current cycle.
Historically, October has been the most favorable month for Bitcoin. However, Thorn noted that “we haven’t experienced back-to-back losing Octobers since 2011 and 2012.”
Currently, Bitcoin, the leading cryptocurrency, has seen a decline of over 8% year-to-date (YTD).
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