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

• BTC outperformed the wider crypto market as measured by the CoinDesk 20 Index during the Friday Asia trading session.
• One analyst said the performance of ether exchange-traded funds mirrors that of the bitcoin ETFs after their launch in January.

Bitcoin BTC$89,607.79 outperformed the broader crypto market during the Asia trading day, adding 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, CoinGecko data shows, with ether ETH$3,034.70, BNB Chain’s BNB and Cardano’s ADA adding 3%. Dogecoin DOGE$0.1398 rose 4%, while Solana-based memecoin POPCAT$0.09748 jumped more than 8% to lead gains in that category.

For the third day, ether products led liquidations across crypto futures, with over $70 million in longs liquidated compared with $55 million on BTC-tracked futures.

Open interest – or the number of unsettled futures bets – dropped by $1 billion over the past 24 hours, indicative of money leaving the market.

Bitcoin Outflows

According to data from SoSoValue, bitcoin exchange-traded funds (ETFs) added a net $31.16 million, bringing the cumulative net flow since their introduction in January to just under $17.5 billion. Total net assets of the ETFs amount to $59.14 billion, or about 4.6% of the entire market cap of the largest cryptocurrency.

Ether, the second-largest, rose 2.8% to top $3,200, according to CoinDesk Indices data. The ether ETFs experienced a net daily outflow of $152 million, SoSoValue data shows. Current cumulative flow for the ETFs since they started trading this week is negative $178.68 million. That's mainly owing to withdrawals from Grayscale Ethereum Trust (ETHE), which converted to an ETF.

"This situation is very similar to the bitcoin ETF product launches at the beginning of the 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 converted from a closed-end structure into an ETF that allowed redemptions for the first time in 10 years, weighed on bitcoin's price over the first weeks. Later, inflows to rival funds overcame the negative trend, propelling BTC to an all-time high in March.

The Grayscale Ethereum Trust is following the same path but faster, making the decline a "prime buying opportunity," said Mads Eberhardt, a crypto analyst at Steno Research.

"If this trend continues, the outflow from the Grayscale Ethereum ETF could end much quicker than it did for bitcoin in January, perhaps as early as mid-next week," Eberhardt said. "After this, we estimate we will see strong net inflow, due to the inflow into the other ETFs as observed over the last few days."

Rachel Lin, CEO and co-founder of SynFutures, disagreed, saying she expects short-term pain for ETH traders.

“As we saw with Bitcoin, Grayscale's ETH ETF fund is becoming a net seller on the market with over $810 million in outflow since the ETF launch,” Lin said in an email to CoinDesk.

“Grayscale currently holds over $8 billion worth of Ether, and nearly 10% of it was sold in just the past two days. If the trend continues, Grayscale might reach the 50% mark far sooner than with Bitcoin. However, that would also mean more downside for Ethereum."

Aave outperforms

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

The proposal, which is currently in a "temp check" phase, where feedback is solicited, would contribute more protocol revenue to buying back AAVE tokens from the secondary market and redistributing them to stakers.