Bitcoin Needs Stable Treasury Yields, Renewed ETF Inflows to Regain Momentum: Wintermute

Bitcoin needs stable U.S. Treasury yields and renewed inflows into spot exchange-traded funds to regain its upward momentum, digital-asset market maker Wintermute said.

In a post on X on Oct. 13, Wintermute said the cryptocurrency market has lost the inflow-driven momentum that had supported prices, while the U.S. stock market continues to be underpinned by corporate earnings. The firm said it would take stabilizing Treasury yields and a resumption of ETF inflows to turn constructive on crypto.

Wintermute also said the Federal Reserve's hawkish stance has recently weighed on digital assets. Minutes from last week's Federal Open Market Committee meeting showed that many officials expected another rate increase this year, while the yield on the 10-year U.S. Treasury climbed to 5.24%.

Against that backdrop, the S&P 500 rose 1.2% last week to a record high. Bitcoin and Ether, by contrast, fell 3.2% and 7.0%, respectively.

U.S. equities have been able to absorb higher Treasury yields because earnings growth is supporting the market, Wintermute said. Crypto assets do not have a comparable stream of corporate profits behind them. In a high-rate environment, a steady flow of new money is needed to sustain price gains.

That dynamic was reflected in ETF flows last week. U.S. spot Bitcoin ETFs posted net outflows of about $679 million, the largest weekly outflow since late June. Spot Ether ETFs also saw about $542 million leave.

Wintermute said two conditions must be met for the crypto market to regain its uptrend: long-term Treasury yields must stabilize, and spot ETF flows must turn positive. Until then, Bitcoin will retain the characteristics of a risk asset that is more volatile than stocks.

The firm added that investors should take a more cautious view if the 30-year U.S. Treasury yield rises above 5.64%, the level reached on Sept. 30, or if Bitcoin repeatedly fails to rebound near $82,500.