Global Market Adjusted by Waller's Hawkish Reversal, ETF Inflow More Important Than Interest Rates for Bitcoin Price
Global Market Adjusted by Waller's Hawkish Reversal, ETF Inflow More Important Than Interest Rates for Bitcoin Price | Seo Dong-ju, Kim Dong-hwan, Kim Je-i Blockmedia Editor-in-Chief [Crypto PLUS]
Speakers
Kim Je-yi
— Blockmedia Editor-in-Chief
Summary
The panel discusses the impact of Fed Chair Waller’s hawkish FOMC comments on global markets and Bitcoin. They highlight that Bitcoin ETF flows have become more influential than interest rates for Bitcoin’s price, but year-to-date outflows remain a concern. They also analyze Strategy’s STRC preferred shares trading at a deep discount, the positive implications of a US-Iran ceasefire for oil prices, and the benefits for private stablecoin issuers from proposed CBDC ban legislation.
- Fed's Waller signaled a hawkish shift with a dot plot implying two rate hikes, but markets expected some hawkishness; Bitcoin dipped.
- Historical correlation shows Bitcoin sensitive to rate changes, but since spot ETF launch, ETF fund flows are now the dominant price driver.
- Bitcoin ETF flows in 2025 have been mostly outflows, emphasizing the need for strong H2 inflows to catalyze a Bitcoin rally.
- BlackRock's IBIT ETF is still seeing net inflows, offering a positive contrast.
- Strategy's preferred stock (STRC) trades at a steep discount to $100 par with an effective ~13% yield, presenting an unusual value opportunity.
- A US-Iran ceasefire agreement and reopening of Hormuz Strait is poised to reduce oil price pressures.
- US legislation banning CBDC while allowing private stablecoins is progressing, benefiting PayPal and other issuers.
Ideas
ETF flows now drive Bitcoin more than rates.
Since the launch of spot Bitcoin ETFs, ETF fund flows have become a more powerful driver of Bitcoin price than Federal Reserve interest rate policy. Institutional flows respond more slowly and create longer-term demand, reducing Bitcoin's sensitivity to macro news. Going forward, ETF inflow data should be treated as the primary leading indicator for Bitcoin direction, with strong inflows needed in H2 to reverse the current stagnation.
BlackRock IBIT keeps net inflows, bullish signal.
While overall spot Bitcoin ETFs have experienced significant net outflows this year, BlackRock's IBIT ETF has sustained net inflows over recent days. This indicates that institutional demand through the leading ETF continues, which is a constructive sign for Bitcoin and could point to accumulation even when broader flow data is weak.
Ceasefire and Hormuz reopening pressure oil lower.
The US-Iran ceasefire agreement and the reopening of the Strait of Hormuz are set to remove a major geopolitical risk premium and increase oil supply availability. This development, combined with an already expected supply glut, points to further downward pressure on crude oil prices.
STRC deep discount offers 13% effective yield.
Strategy's preferred stock (STRC) is trading at $89, a deep discount to its $100 par/liquidation value that Strategy is likely to maintain. Combined with an annual dividend yield of about 12.9%, the effective yield exceeds 13% if the price reverts to par, offering a fixed-income-like total return that the market is currently overlooking.
CBDC ban rewards PayPal stablecoin business.
The US legislation that bans CBDCs while allowing private stablecoins is advancing, likely to pass. This will benefit major private stablecoin issuers like PayPal by removing central bank competition and solidifying the legal environment for their stablecoin businesses, driving growth and adoption.
