Bitcoin Eyes Second Weekly Loss Amid ETF Outflows and Macro Headwinds

Bitcoin slipped in late trading on Friday, putting the leading cryptocurrency on course for its second straight weekly loss as a confluence of macroeconomic pressures and negative fund flows weighed on investor sentiment.

The anticipated seasonal strength of “Uptober” has failed to materialize for the second consecutive year, with Bitcoin down over 2% so far this month. As of 17:49 ET, Bitcoin traded down 0.8% at $81,592.1, bringing its weekly decline to 1.6%, according to Investing.com data.

Broader Market Jitters Weigh on Crypto

A recent sell-off in high-growth technology and artificial intelligence stocks on Wall Street appears to have created a spillover effect into digital assets. The weakness comes as hotter-than-expected inflation data for September has increased bets on higher U.S. interest rates.

Elevated interest rates and bond yields typically increase the opportunity cost of holding non-yielding, speculative assets like cryptocurrencies. This risk-off sentiment, combined with soaring oil prices, has prompted some profit-taking in Bitcoin following its strong performance in the second quarter.

ETF Outflows Continue as Altcoins Slide

Adding to the headwinds, U.S.-listed spot Bitcoin exchange-traded funds (ETFs) are poised for their second consecutive week of net capital outflows. Data from SoSoValue showed that approximately $146.2 million has been withdrawn from the products so far this week.

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The negative sentiment has impacted the broader cryptocurrency market, with most major altcoins also set for weekly losses:

• Ether (ETH): -2.7%
• XRP: -6.2%
• Solana (SOL): -4.4%
• Cardano (ADA): -6.1%

MicroStrategy Stock Falls on MSCI Index Rule Change

In related market news, shares of MicroStrategy (MSTR), the largest publicly traded corporate holder of Bitcoin, fell 9.6% on Friday. The decline followed an announcement from index provider MSCI that it will adopt new rules that could lead to the company's exclusion from its indexes.

MSCI stated the new methodology, effective with its November review, will use screens tied to operating assets and financial ratios to determine the eligibility of non-operating companies. This change replaces interim restrictions that had targeted firms with digital asset holdings exceeding 50% of total assets.