‘Hot money’ flees Bitcoin at record pace

Investor sentiment has been rattled by Trump’s combative trade policies, which have reignited fears of economic disruption. Meanwhile, stubbornly high inflation has added to the mood, fuelling a selloff in risky assets. Sentiment also worsened after hackers stole nearly US$1.5 billion from the Bybit exchange, the biggest theft in the history of crypto, and traders suffered big losses on highly speculative tokens known as memecoins.
“Hot money that chases Bitcoin, or any speculative trade, flows out as fast as it entered when prices start falling,” said Michael Rosen, chief investment officer at Angeles Investments. “It’s a good reminder that Bitcoin is not an investment, it is a highly speculative trade.”
While Bitcoin funds are seeing an exodus, investors added nearly US$18 billion this month to SPDR S&P 500 ETF Trust (SPY), the most since December 2023 and a reversal from January’s outflow, and US$6 billion into Invesco QQQ Trust (QQQ). Those flows came even as the Nasdaq 100 Index dipped as much as 7.3 per cent from its last record on Feb. 19.
Strategists at Bank of America Corp. wrote that Bitcoin’s inability to stay above the US$97,000 mark was the first sign of what they call the “bro bubble” popping.