Markets again start the day with uncertainty and lack of direction, as investors digested Netflix’s earnings and cryptocurrency traders gear up for the bitcoin halving.
Netflix Inc. reported earnings after the bell Thursday, and while the tech and media giant reported strong subscriber numbers, investors were left pessimistic after the company gave a weaker than expected forecast for its Q2 earnings. Netflix dropped around 8% midmorning Friday, dragging down with it the tech-heavy Nasdaq.
Netflix was among the first of the megacap tech companies to report earnings, and stumbling out the gate with the weaker forecast hasn’t provided investors with the boost needed to shake off recent pullbacks in the market.
QQQ, the Invesco QQQ Trust which tracks the Nasdaq, slipped Friday, dropping 1%. According to etf.com data, QQQ saw outflows topping $425M on Thursday.
QQQ April Flows
Source: etf.com
XLK, the Technology Select Sector SPDR Fund similarly struggled Friday. The fund doesn’t hold Netflix, but is a broad look at the tech sector, as investors considered the potential for disappointing tech earnings. Next week investors will turn their attention to Meta, Alphabet (Google), and Microsoft.
SPY, the SPDR S&P 500 ETF Trust was in the red Friday morning as the S&P 500 teetered. DIA, the SPDR Dow Jones Industrial Average ETF Trust was the only index in the green Friday as investors overlooked ratcheting tensions between Iran and Israel.
Crypto ETFs Rise as Bitcoin Halving Approaches
And cryptocurrency ETFs were picking up steam on Friday. The rise comes as investors wait for the long-anticipated bitcoin halving. BTOP, the Bitwise Bitcoin and Ether Equal Weight Strategy ETF was one of the top gainers Friday according to etf.com data. The GraniteShares 2x Long COIN Daily ETF (CONL), and the First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT) were also in the green.
The event, is, simply put, a time when the reward for bitcoin miners to create new bitcoin is cut in half. Halvings occur every four years and maintain the scarcity of bitcoin. Historically, the events precede a rally in bitcoin prices. It’s not certain exactly when a halving will occur, but traders are anticipating the event could happen anytime between Friday and Sunday morning.
And the largest spot bitcoin ETF, IBIT, the iShares Bitcoin Trust rose nearly 2% ahead of the halving. According to etf.com data, flows into the ETF have been on the rise since the start of April, topping $1B in the last two weeks.
IBIT April Flows
Source: etf.com
Many investors are looking to the halving as a potential buy opportunity, hoping for a potential pop in bitcoin prices. But it’s unclear if this year’s halving will have the same effect since the launch of spot bitcoin ETFs which have already fueled a rise in bitcoin prices.
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