The National Bank of Canada, one of the grand dames of Canadian banking, has recently made a rather cryptic move in the world of cryptocurrency. The bank has acquired a right to sell a portion of its Bitcoin exchange-traded fund (ETF) holdings, hinting at a bearish sentiment on Bitcoin (BTC).
In a filing with the Securities and Exchange Commission (SEC) on Feb. 12, the bank revealed its acquisition of a put option for over $1.3 million of BlackRock’s iShares Bitcoin Trust ETF. With over $94.3 billion in total holdings across asset classes as of Dec. 31, 2024, the bank’s move is certainly worth a second glance.
The bank’s puts on the Bitcoin ETF holdings come amid several days of Bitcoin ETF outflows as markets react to an international trade war and macroeconomic uncertainty by fleeing risk-on assets for safe-haven financial instruments. Could this be the beginning of a bearish trend for Bitcoin?
As markets react to macroeconomic uncertainty, Bitcoin stalls and bleeds. Data from Farside Investors shows that outflows from Bitcoin ETFs began on Feb. 10, with over $183 million in liquidity pulled by investors. Outflows continued on Feb. 11, with $56.7 million, and surged to $251 million on Feb. 12. Bitcoin ETF outflows continued for a fourth consecutive day on Feb. 13, with over $156.8 million in funds leaving BTC ETFs.
President Donald Trump’s recent announcement of several rounds of tariffs, starting with import taxes on goods from China, Mexico, and Canada, has caused the price of Bitcoin to sink below $100,000 where it has mostly remained since markets began digesting the news. Following the initial round of tariffs, the US President imposed a 25% tariff on steel and aluminum imports and sweeping reciprocal tariffs on trading partners. Hotter-than-expected Consumer Price Index (CPI) figures released on Feb. 12 also sent the price of Bitcoin tumbling below $95,000 as markets reacted to an uptick in inflation.
Could this be the end of Bitcoin’s meteoric rise? Only time will tell. But one thing is for sure – the National Bank of Canada’s move has certainly added fuel to the fire of speculation!
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2025-02-14 20:26