Markets
Bitcoin Price Outperforms Broader Crypto Market, Ether (ETH) Price Drop Reflects Bitcoin (BTC) ETF Launch
Bitcoin (BTC) outperformed the broader cryptocurrency market during the Asian trading day, adding 4.4% to test $67,000 while the CoinDesk 20 Index (CD20) increased by 3.3%.
Solana’s SOL surged more than 5% to lead gains among major tokens, according to data from CoinGecko, along with ether (ETH)BNB Chain’s BNB and Cardano’s ADA add 3%. Dogecoin (DOGE) rose 4%, while Solana-based memecoin popcat (POPCAT) jumped more than 8% to lead gains in the category.
For the third day, Ether products led liquidations on cryptocurrency futures, with over $70 million in longs liquidated versus $55 million on futures contracts tracked by BTC.
Open interest – or the number of unsettled futures bets – has fallen by $1 billion in the past 24 hours, indicating that money is leaving the market.
Bitcoin exchange-traded funds (ETFs) generated a net inflow of $31.16 million, according to data from SoSoValue, bringing the cumulative net inflow since their launch in January to just under $17.5 billion. The ETFs’ total net assets stand at $59.14 billion, or about 4.6% of the largest cryptocurrency’s total market capitalization.
Ether, the second largest, rose 2.8% to above $3,200, according to CoinDesk Index DataEther ETFs saw a daily net outflow of $152 million, SoSoValue data shows. The current cumulative ETF flow since they began trading this week is negative $178.68 million. This is mainly due to withdrawals from Grayscale Ethereum Trust (ETHE), which converted to an ETF.
“This situation is very similar to the Bitcoin ETF product launches earlier this year,” CoinShares analysts said in an emailed note.
Outflows from the Grayscale Bitcoin Trust (GBTC), the world’s largest bitcoin fund at the time, which transitioned from a closed-end structure to an ETF allowing redemptions for the first time in 10 years, weighed on bitcoin’s price in the early weeks. Later, inflows to competing funds overcame the negative trend, propelling bitcoin to an all-time high in March.
The Grayscale Ethereum Trust is following the same path but faster, making this decline a “prime buying opportunity,” said Mads Eberhardt, crypto analyst at Steno Research.
“If this trend continues, outflows from the Grayscale Ethereum ETF could end much faster than bitcoin did in January, perhaps as early as the middle of next week,” Eberhardt said. “After that, we believe we will see a strong net inflow, driven by the inflows into other ETFs seen over the past few days.”
Rachel Lin, CEO and co-founder of SynFutures, disagrees, saying she expects short-term difficulties for ETH traders.
“As we saw with Bitcoin, Grayscale’s ETH ETF is becoming a net seller in the market with over $810 million in outflows since the ETF’s launch,” Lin said in an email to CoinDesk.
“Grayscale currently holds over $8 billion worth of Ether, and nearly 10% of that has been sold in the last two days alone. If the trend continues, Grayscale could hit the 50% mark much sooner than Bitcoin. However, that would also mean a bigger drop for Ethereum.”
Looking away from BTC and ETH, AAVE, Aave’s native token Decentralized Finance The (DeFi) protocol is up 15% as the market reacts to a token buyback proposal.
The proposal, which is currently in a “temporary review” phase where comments are being sought, would help increase the protocol’s revenue by buying back AAVE tokens on the secondary market and redistributing them to stakers.