Bitcoin and Ethereum Move in Opposite Directions, Creating Confusion Among Investors

The two largest cryptocurrencies, Bitcoin and Ethereum, are moving in opposite directions, creating confusion among investors.

The two largest cryptocurrencies, Bitcoin and Ethereum, are moving in opposite directions, leaving investors scratching their heads.

While Ethereum (ETH) took a hit last week, falling 7% to $2,525, Bitcoin (BTC) remained relatively stable at $68,957, according to data from CoinGecko.

This divergence is noteworthy as Bitcoin and Ethereum usually rise and fall in tandem. However, this time around, the dynamics have shifted, explained Ben Caselin, chief marketing officer at crypto exchange VALR.

Despite the impressive rally of Solana (SOL), which rose nearly 7% in the past week, Bitcoin’s resilience can be attributed to two key factors: continuous flows into spot Bitcoin ETFs and the memecoin hype that refuses to die down.

This rally in BTC and Solana has further highlighted the divergence trend that began after spot Ether ETFs went live in July.

Since the launch of spot Ethereum ETFs, the price of Ethereum has dropped by 36%, while Bitcoin has seen a modest gain of 2%.

Despite the anticipation surrounding Ethereum ETFs, these financial products have failed to generate the same level of interest as their Bitcoin counterparts.

Data from SoSo Value reveals that spot Ethereum ETFs have experienced net outflows of over $504 million since July. In contrast, spot Bitcoin ETFs, which launched in January, have seen inflows of around $22 billion.

“Regulators and traditional investors are showing more openness to BTC, but not ETH, at least not yet,” said Shauli Rejwan, Managing Partner at Masterkey.VC.

Ethereum’s recent decline coincides with the increasing popularity of other layer 1 protocols, such as Solana.

Ben Caselin highlighted the absence of any guarantee that Ethereum will maintain its top spot in the long term. But he noted that upcoming events, like the US elections, could introduce volatility, which may benefit the price of ETH in the short term. However, he adds that such events could also serve as an “exit liquidity” point for some investors.

But Rejwan remains cautiously optimistic, arguing that it’s too early to count out Ethereum. According to him, Wall Street’s interest in spot Ethereum ETFs could take six to 10 months to materialize, or it might accelerate if a bull run begins.

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