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Investing.com-- Bitcoin dipped on Friday and was set for a second straight week of losses as risk appetite for cryptocurrencies was battered by concerns over U.S.-China trade tensions and potential credit risks.
Crypto markets tracked declines in broader risk-driven assets, with Wall Street and global stock markets retreating on rising economic uncertainty. An ongoing U.S. government shutdown weighed on sentiment, especially with the delay of several key economic readings.
Bitcoin fell 4.6% to $106,070 by 09:32 ET (13:32 GMT). The world’s largest crypto was set to lose more than 8% this week, after clocking a 10% drop in the prior week.
Bitcoin struggled to advance after a flash crash wiped out nearly half a trillion dollars of crypto market capitalization last week, dragging the world’s biggest crypto as low as $103,000. The crash stemmed from heightened U.S.-China trade tensions, and also saw a record-high, $16 billion liquidation of long positions.
While the coin did recoup some losses this week, especially on the back of dovish signals from the Federal Reserve, it and broader crypto markets remained squarely on the backfoot.
Bitcoin also traded well below early-October record highs of over $126,000.
Risk aversion increased this week amid growing concerns over credit risks in regional U.S. banks. Said concerns sparked deep losses in U.S. bank stocks on Thursday, and spilled over into broader markets.
Ripple Labs seen seeking $1 bln funding for XRP buying
XRP issuer Ripple Labs is leading efforts to raise $1 billion in funding to build a stockpile of the token, Bloomberg reported on Friday.
While more buy actions bode well for XRP, the token showed little positive reaction to the report, falling 3.7% to $2.3385. The token also remained close to a 11-month low hit during last week’s flash crash.
Bloomberg reported the money will be raised through a special purpose acquisition vehicle, while Ripple will also contribute some of its own XRP to the stockpile.
XRP was trading down nearly 2% this week after a 19.8% slump last week.
Crypto correction was driven by native traders, not ETF investors: JPM
Last week’s sharp crypto selloff was mainly driven by crypto native traders rather than traditional investors using regulated products, according to JPMorgan analysts.
In a note led by managing director Nikolaos Panigirtzoglou, the bank said there was “little evidence” of meaningful liquidation activity in spot bitcoin ETFs, which tend to be used by mainstream retail investors.
Between Oct. 10 and Oct. 14, bitcoin ETFs saw just $220 million of outflows, or 0.14% of assets under management, while Ethereum ETFs recorded $370 million in withdrawals, or 1.23% of AUM.
CME Bitcoin futures — a key barometer of institutional sentiment — showed limited stress, while CME Ethereum futures saw more pronounced deleveraging, which Panigirtzoglou attributes to “greater de-risking” by momentum-driven players such as commodity trading advisors and quant funds.
The bulk of the damage instead came in perpetual futures, a venue heavily used by crypto native participants. Open interest in bitcoin and Ethereum perpetual contracts dropped by around 40% in dollar terms, a much steeper fall than the underlying price moves.
According to Panigirtzoglou, that pattern points to crypto native investors as the main force behind the correction, with non-crypto native investors — typically active in CME futures or ETFs — largely staying out of the selloff.
Crypto price today: altcoins sink; BNB tumbles 10%
Broader crypto prices also tumbled on Friday, tracking the weakness in Bitcoin.
World no.2 crypto Ether fell 6.6% to $3,784, while Binance’s BNB fell around 10% to $1,069.
Cardano and Solana fell more than 8% each.
Among memecoins, Dogecoin sank 8.2% and $TRUMP lost over 5%.
(Ambar Warrick contributed to this report.)