Today in Markets

BTC's ETF Hangover

It's been a tough day for Bitcoiners
Jan 12, 20241 min read

Enter Ether: Notorious countertrade indicator Jim Cramer may have tweeted that BTC's top is in, but the statements have done little to bolster price, with BTC down 6% on the day. Cramer has spoken, so why aren’t we pumping?

Bitcoin has demonstrated tremendous weakness against alts since dominance peaked on Tuesday, with BTC falling a further 4.6% against the total crypto market cap, excluding BTC, today, for a total loss of 12.6% over the last four days.

Despite the impressive $721M that flowed into BTC from ETF creations yesterday, today’s sell-off is a result of the demand for Bitcoin spot products failing to live up to the market’s expectations for inflows, an understandable disconnect given the extreme level of bullishness crypto has displayed over spot ETF approval.

While BTC bulls lick their wounds and broader crypto markets fall into retreat mode, Ethereum, a crypto asset that has been the laggard in recent rallies, is finally gaining strength, with the ETH/BTC ratio up 5.7% on the day!

Ethereum’s strength is due in no small part to its impending ETF approval, a narrative further bolstered by BlackRock CEO Larry Finch’s statement that he sees value in an Ethereum ETF! 

As exciting as this rotation may be for Ether bulls, it may be worth keeping in mind that the Ether pump could be fleeting, especially when considering that BTC inflows from spot ETFs are already disappointing the market.

ETF issuers need to find new demand for their products to succeed and balloon in AUM, and the near-term future for crypto prices is heavily reliant on their ability to do so with the industry’s internal capital stocks already heavily stretched to the long side.

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