Bitcoin's funds sell with the price

In the three sessions to Wednesday 7 October, the US spot bitcoin funds lost $455.9 million to withdrawals. Wednesday's $484.9 million was their biggest single day since 25 June, and it came the day the Fed's minutes said most officials thought another rate rise likely by the end of the year.

Bitcoin closed Monday at $81,761, 4.8% below the Monday before.

The reading going round is that the funds are what pushes bitcoin down, so more withdrawals mean a lower price. Our record gives us a way to test that.

It starts on 2 April and holds every session since. Across the 26 full weeks from 6 April to 2 October, the funds took in money in 15 weeks and lost it in 11.

In the average week of inflows, bitcoin rose 4.4%. In the average week of outflows, it fell 3.1%. The funds and the price move together.

That doesn't tell you the order. If the funds sell first and the price follows, Wednesday's withdrawals are a warning. If they sell because the price is falling, the withdrawals add nothing the price hasn't already told you. So we set each week's flow beside bitcoin's move in the same week, and then beside its move in the week after. The two results are a long way apart.

The same-week result is the one the reading going round expects. On a scale from zero, no connection, to one, moving in lockstep, the funds' weekly flow and bitcoin's weekly move score 0.72.

We measure bitcoin Sunday to Sunday on our daily closes, and the funds' flow is the sum of that week's sessions. The daily figures agree on this half: across 127 sessions, a day's flow scores 0.55 against that day's price move. Wednesday fits, with bitcoin closing 2.6% lower.

The week after is the test that decides whether Wednesday's withdrawals were a warning.