Crypto
SNB rejects crypto for reserves amid $218M US Bitcoin ETF outflow, citing liquidity and value concerns.
By Barry Stearns
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The Swiss National Bank (SNB) has made it clear that it does not plan to invest its reserves in cryptocurrencies like Bitcoin, as stated by President Thomas Jordan during the bank's annual shareholder meeting. Jordan emphasized the need for currency reserves to be liquid, retain their value, and be easily tradable, criteria that cryptocurrencies currently do not meet according to the SNB's assessment. This announcement comes amidst a backdrop of Swiss crypto activists pushing for a constitutional amendment that would require the SNB to hold a portion of its reserves in Bitcoin. The activists are in the process of collecting signatures to force a national vote on the issue.
The US Bitcoin ETF market has seen a significant outflow of $218 million, marking one of its worst daily performances. This trend reflects growing investor caution amid fading hopes for Federal Reserve interest-rate cuts and concerns over rising Treasury yields and inflation. The Fidelity Wise Origin Bitcoin Fund, among others, experienced its first drawdown since its launch, highlighting the broader challenges facing crypto investments. Despite these outflows, Bitcoin's price has remained stable above $64,000, suggesting a resilience in the cryptocurrency's value against market fluctuations.
The end of BlackRock Inc.’s Bitcoin fund, IBIT's 71-day streak of consecutive inflows, signals a cooling interest in crypto investments within the ETF sector. This slowdown comes at a time when the upcoming launch of Bitcoin and Ether ETFs in Hong Kong is expected to increase competition in the market. Meanwhile, the SNB's President Thomas Jordan has warned of potential inflation shocks in Switzerland, underscoring the uncertain economic environment that could impact investment strategies, including those related to cryptocurrencies.
"We have so far not decided to invest in Bitcoin and for good reasons. Currency reserves are international means of payment, which need to be liquid, must retain their value and we must be easily able to buy and sell them."
Finance GPT
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