Bitcoin Falls 1.3% as Nasdaq-100 Drops 5.5%

Bitcoin fell from $82,546.32 to $81,500.80 between Oct. 9 and Oct. 16, based on UTC daily closes. The Nasdaq-100 declined from 30,883.15 to 29,187.55 over the same period. Bitcoin’s decline was about 1.3%, compared with a 5.5% drop for the index.

The comparison is approximate because Bitcoin’s UTC close occurred four hours after the Nasdaq’s 4 p.m. Eastern Time close in October.

Goldman Sachs’ prime brokerage data showed that global equities were sold at a rate two standard deviations above the prior year’s flow distribution. Semiconductor companies recorded the largest dollar outflows, while technology stocks had their biggest reduction in gross positions in two months.

Technology accounted for 23.5% of net allocations in Goldman’s global prime brokerage portfolio, placing it in the 90th percentile of the past five years. Hedge-fund net leverage fell to 48.6%, its lowest level in a year.

U.S. spot Bitcoin exchange-traded funds recorded net outflows of $678.9 million in the week ended Oct. 9 and $228.4 million from Oct. 12 to Oct. 16. The combined outflows equaled about 35% of the $2.63 billion that entered the funds between Sept. 21 and Oct. 2.

The funds returned to net inflows on Oct. 19, attracting $526.7 million. BlackRock’s IBIT accounted for $665.2 million of those inflows.

Commodity Futures Trading Commission data showed that leveraged funds reduced their net short position in Bitcoin futures by 1,008 contracts, or 14.71%, in the week ended Oct. 13. Gross short positions fell by 1,219 contracts, while gross long positions declined by 211 contracts.

Leveraged funds still held 5,844 net short contracts, equivalent to about 29,220 bitcoin. Open interest on the Chicago Mercantile Exchange fell 3.17%. The CFTC figures covered positions before the equity selloff from Oct. 14 to Oct. 16 and do not establish whether short covering contributed to Bitcoin’s relative performance.

The International Monetary Fund’s Oct. 6 research estimated that hedge funds held about $13 trillion in gross assets and $40 trillion in gross notional exposure. The analysis found that the most crowded hedge-fund stocks were about 10 percentage points more volatile and suffered peak-to-trough losses about four percentage points deeper than the least crowded stocks.

The IMF’s October Global Financial Stability Report identified leverage, concentrated positions, pressure on prime brokers and correlated redemptions as channels that can spread losses across markets. Falling valuations for artificial-intelligence and semiconductor stocks can raise margin requirements and prompt funds to sell liquid assets, including Bitcoin.

Technology and semiconductor stocks rebounded on Oct. 19. A CFTC report scheduled for Oct. 23 was set to cover positions through Oct. 20. The Federal Reserve’s next policy decision was scheduled for Oct. 28.