BTC Outperforms Broader Crypto Market, Ether Price Drop Mirrors Bitcoin ETF Launch

BTC outperformed the broader cryptocurrency market as measured by the CoinDesk 20 Index during the Asian trading session on Friday.

The performance of ether exchange-traded funds launched in January mirrors that of bitcoin ETFs, one analyst said.

Bitcoin {{BTC}} outperformed the broader cryptocurrency market on the Asian trading day, rising 4.4% to test $67,000, while the CoinDesk 20 Index (CD20) rose 3.3%.

Solana’s SOL jumped over 5% to lead gains among major tokens, according to CoinGecko data, with ether {{ETH}}, BNB Chain’s BNB and Cardano’s ADA adding 3%. Dogecoin {{DOGE}} rose 4%, while Solana-based memecoin popcat (POPCAT) jumped over 8% to lead gains in this category.

On the third day, ether led the liquidations in crypto futures, with over $70 million worth of longs liquidated compared to $55 million in futures tracking BTC.

The number of open positions (or the number of futures bets that have not yet settled) has fallen by $1 billion in the last 24 hours, an indication that money is leaving the market.

Bitcoin Outflows

Bitcoin exchange-traded funds (ETFs) added a net $31.16 million, bringing cumulative net flows to just under $17.5 billion since they launched in January, according to data from SoSoValue. The ETFs’ combined net assets are equivalent to $59.14 billion, or about 4.6% of the largest cryptocurrency’s entire market cap.

Ether, the second-largest, rose 2.8% to above $3,200, according to CoinDesk Index data. Ether ETFs saw net outflows of $152 million on the day, SoSoValue data shows. The current cumulative flow since the ETFs began trading this week is minus $178.68 million. That’s primarily driven by withdrawals from the Grayscale Ethereum Trust (ETHE), which is converting to an ETF.

“This situation is very similar to the Bitcoin ETF products that were launched at the beginning of the year,” CoinShares analysts wrote in an email.

Outflows from the Grayscale Bitcoin Trust (GBTC), the world’s largest bitcoin fund at the time, which had transformed from a closed-end structure to an ETF that allowed redemptions for the first time in 10 years, affected bitcoin’s price in the first weeks. Later, inflows to rival funds overcame the negative trend and pushed BTC to an all-time high in March.

Grayscale Ethereum Trust is following the same path faster, and the drop is a “significant buying opportunity,” said Mads Eberhardt, a crypto analyst at Steno Research.

“If this trend continues, the outflow from the Grayscale Ethereum ETF could be much faster than bitcoin in January, perhaps finishing in the middle of next week,” Eberhardt said. “After that, we anticipate seeing strong net inflows due to the inflows into other ETFs that have been observed over the last few days.”

The story continues

SynFutures CEO and co-founder Rachel Lin disagreed with this view and said that she expects trouble for ETH investors in the short term.

“As we have seen with Bitcoin, Grayscale’s ETH ETF fund is becoming a net seller in the market with over $810 million in outflows since the ETF launch,” Lin wrote in an email to CoinDesk.

“Grayscale currently holds over $8 billion worth of Ether, of which about 10% has been sold in the last two days alone. If this trend continues, Grayscale could reach the 50% mark much sooner than Bitcoin. But that also means further declines for Ethereum.”

Aave performs better

Moving away from BTC and ETH, AAVE, the native token of the Aave decentralized finance (DeFi) protocol, surged 15% as the market reacted to a token buyback proposal.

The proposal, currently in the “provisional review” phase where feedback is being collected, will contribute to providing more protocol revenue for the repurchase of AAVE tokens from the secondary market and redistribution to stakers.