Bitcoin Slides as Launch of 11 Bitcoin ETFs Fails to Sustain Momentum
Bitcoin faced a significant setback on Friday after what was expected to be a momentous week for the cryptocurrency. Despite the launch of 11 bitcoin ETFs in the U.S. after years of fighting for institutional acceptance, the price of bitcoin slid nearly 6% to $44,022.22. This decline pulled most of the crypto market into the red, with some exceptions. In the days leading up to this slide, bitcoin briefly surged to $49,058.48, its highest level since December 2021. Ultimately, however, it ended the week around the flat line.
Ether Continues to Rise as Investors Rotate Out of Bitcoin
While bitcoin struggled, ether saw a rise of around 2% for the week. This increase extended the gains it had already experienced, as investors rotated out of bitcoin and into ether, following the widely expected approval of bitcoin ETFs by the SEC. In fact, ether rose to its highest level since May 2022. Analyst Alex Saunders from Citi believes that the crypto market has already embraced a new narrative, with ether rallying more than bitcoin. This rally is likely due to the expectation that ether, as the second largest token, could also see an ETF approval. Overall, ether was up 18% for the week.
SEC Set to Decide on Spot ETH ETF Applications Starting in May
The SEC is anticipated to make decisions on spot ETH ETF applications starting in May. This news has drawn attention from firms such as BlackRock, Invesco, Ark, and VanEck, as well as Grayscale, which aims to convert its existing Ethereum Trust into an ETF. Ether has lagged behind bitcoin in terms of performance, with only a 90% rise compared to bitcoin’s 157% over the course of 2023. However, many market participants expected the long-awaited bitcoin ETF approvals to be a sell-the-news event. It may take some time for the full impact of ETFs to be realized as newcomers to the crypto market become more familiar with the asset and gradually enter the market.
Bitcoin ETF Approvals Not a Sell-the-News Event, Say Market Participants
Market participants across the board agree that bitcoin ETF approvals will benefit the bitcoin price, but they do not believe it will be an immediate sell-the-news event. Many investors and miners currently hold high unrealized profits, thanks to the ETF narrative driving bitcoin up by more than 60% in the past three months. However, the widespread inclusion of bitcoin in portfolios is still some time away. This sentiment aligns with expectations that bitcoin’s potential for inclusion will eventually take on extra prominence, once newcomers to the market become more comfortable with the asset.
Crypto Equities Fall Alongside Bitcoin, Miners Experience Big Losses
Along with bitcoin, crypto equities also experienced a decline. Coinbase and Microstrategy saw a drop of 5% and 7%, respectively. Even miners, who had suffered significant losses the previous day, continued to experience downward movement. CleanSpark declined by 10%, Iris Energy tumbled more than 14%, Marathon Digital slid 12.5%, and Riot Platforms retreated 6%. This overall decline in the crypto market highlights the interconnected nature of these assets and their vulnerability to shifts in sentiment and market conditions.
These developments underscore the ongoing volatility and unpredictability of the cryptocurrency market. As the market awaits decisions on ETH ETF applications and further institutional acceptance, both bitcoin and other cryptocurrencies are likely to experience fluctuations in the coming months.
Analyst comment
Positive news: Ether continues to rise as investors rotate out of Bitcoin, with an 18% increase for the week. Market participants believe Bitcoin ETF approvals will benefit the Bitcoin price in the long run.
Neutral news: SEC set to decide on spot ETH ETF applications starting in May. It may take some time for the full impact of ETFs to be realized.
Negative news: Bitcoin slides after the launch of 11 Bitcoin ETFs, declining nearly 6% to $44,022.22. Crypto equities and miners also experience losses, highlighting the volatility and vulnerability of the market.
