Bitcoin Momentum Slows, Ethereum ETFs Soar
TL;DR Breakdown
- This cycle is driven by ETFs and crypto treasuries, though treasury bids are slowing.
- Bitcoin and Ether surged toward fresh highs, but recent withdrawals pulled the crypto market back.
- Ethereum ETFs now account for 15% of spot volume, up from 3% last year.
This cycle has been all about exchange-traded funds (ETFs) and crypto treasuries. TCs (treasury companies) drove a big part of the early rally, but their structural bids are slowing as NAVs compress. That leaves ETFs carrying more of the market’s weight. Spot sovereign buying is still out there, harder to see, and could surprise
Wall Street taking bets on crypto linked ETFs has sent Bitcoin and Ethereum both towards their fresh all-time high. However, the recent withdrawals have led the crypto market red. The global digital assets market cap managed to jump over $4 trillion market but the recent sell-off has led it back to the $3.8 trillion level.
Bitcoin Holds Steady Despite Weak Momentum
After a slow start to September, ETFs turned bullish again, following the pattern we’ve seen with tops and bottoms since they launched. A roughly 25% correction was expected once these two forces hit the new all-time high. It is pretty normal for Bitcoin’s volatility.
Analyst suggests that Liquidity is still supportive, but momentum is weak. This frustrates those chasing parabolic moves. Bitcoin’s steady climb mirrors the slow pace of global liquidity. A dull cycle like this could mean a shallow bear market, but also a longer grind. When central banks loosen again, we could see another leg up. It will likely help altcoins along the way. Worst-case drawdowns could reach around 50%, but we’re far from that yet.
Bitcoin dipped recently, but it is still running up by 20% on a year-to-date (YTD) basis. BTC is trading at an average price of $111,870 at the press time. Its 24 hour trading volume is down by 28% to stand at $47.41 billion. This shows a low investor’s confidence.
Ether ETFs Hit 15% of Spot Volume
Ethereum ETFs now account for 15% of spot market volume. It is up from 3% last November. Both institutions and retail investors prefer regulated ETH exposure over holding tokens directly. ETFs remove the headaches of wallets and security, letting anyone with a brokerage account buy in.
The influx of ETF capital has helped push ETH above $4,500, but there’s a trade-off. A lot of this ETH sits idle in custody rather than being staked or used in DeFi. That’s the tension between mainstream adoption and decentralized network utility.
That might change soon. ETF providers may soon be allowed to stake their ETH, letting it earn yield while staying under regulatory oversight. Expect ETFs to play an increasingly dominant role in ETH trading volumes. Mainstream adoption is coming fast but the ecosystem will need to find a balance between these giant inflows and the principles of decentralization.
