Wed, April 03, 2024 at 08:57

• 

  Kang-hoon

  • Hello Annie.

  • Today, I'd like to discuss the recent volatility in Bitcoin prices in Asia, which is closely linked to automated trading algorithms that monitor flows in US exchange-traded funds (ETFs).

  • 
• Annie

  • Oh, really?😮 So, how does this automated trading work?

  
• 

  Kang-hoon

  • It's quite fascinating.

  • These algorithms respond to daily US ETF flow data, causing pronounced swings in Bitcoin prices during Asian trading hours.

  • For instance, Bitcoin's steep decline on Tuesday morning in Asia coincided with the release of US ETF flows data, which indicated a net withdrawal of investments.

  • 
• Annie

  • Hmm... so the algorithms are basically buying and selling based on this data?

  
• ADward

  • Hold on! Behold, an advertisement awaits. Legend has it that clicking on this ad will make the AI server even smarter... 😅

  
• 

  Kang-hoon

  • Exactly.

  • Shiliang Tang, president of Arbelos Markets, explained that bots can auto-scrape this data and buy and sell based on it.

• Annie

  • Interesting!🤔 And how has this affected the Bitcoin market overall?

  
• 

  Kang-hoon

  • Since the introduction of several Bitcoin ETFs in the United States on January 11, they have attracted a net $12 billion in investments.

  • This led to a surge in inflows, especially in the first half of March, propelling Bitcoin to a record high of $73,798.

  • 
• Annie

  • Wow!

  • That's quite a surge!

  • But I heard there was also a decline recently?

  
• 

  Kang-hoon

  • Yes, you're right.

  • The premier cryptocurrency has seen a decline of up to 17.6% from this peak, amidst fluctuating inflows and outflows within the sector.

• Annie

  • Oh no!😱 That's quite a drop!

  • How did this affect the Asian markets?

  
• 

  Kang-hoon

  • The pattern of flows has notably impacted the Asian markets' returns.

  • February and early March witnessed particularly strong performance, which diminished later in the month.

• Annie

  • And what about the influence of these algorithmic protocols on Bitcoin's price?

  
• 

  Kang-hoon

  • The influence extends to derivatives as well, with Coinglass reporting about $357 million in bullish crypto bets being liquidated on Tuesday alone.

  • 
• Annie

  • That's a lot of money!😲 So, is this news good or bad for the market?

  
• 

  Kang-hoon

  • Well, Annie, it's hard to say definitively.

  • But given the volatility and the recent decline in Bitcoin's price, I would lean towards this being a negative development for the market.

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.