Bitcoin, Ether Slide as Risk Aversion Spreads to Crypto Market
Ether, the second-largest token, paced a drop in digital assets following a slump in equities that spread unease in global markets.
Ether slid as much as 7.8%, the most in three weeks, and was trading at $3,172 as of 10:39 a.m. Thursday in New York. Market-leader Bitcoin was down approximately 2.4% to $64,428.
Tumbling megacap technology shares consigned the US stock market to its worst day since 2022 on Wednesday as feverish support for the artificial intelligence theme began to fray. The retreat has soured investors’ mood. Major US. equity indexes were mostly lower again Thursday.
“It mainly seems that after a bad night for equities in the US, crypto like most asset classes is feeling a little bit of a flow-on effect in sentiment,” said Benjamin Celermajer, co-chief investment officer at Magnet Capital.
The yen at one point rose to the highest in more than two months against the dollar, reflecting burgeoning wagers that the interest rate gap between Japan and the US will likely narrow.
“Crypto got thrown out with gold and oil while the yen was strengthening against the dollar last night,” said Andrew Stein, an analyst at Fintech Partners.
Eight new spot-Ether exchange-traded funds debuted in the US on Tuesday while the more than six-year-old Grayscale Ethereum Trust — the largest for Ether with assets of $8 billion — converted from a closed-end structure into an ETF.
The Grayscale fund’s conversion smooths exits for the likes of arbitragers, and $811 million has left the product since the change, data compiled by Bloomberg show. That has spurred some caution even as the other Ether ETFs attract money.
“The Grayscale outflows have been massive, and that’s led to under performance and disappointment,” Stein said.
There may have been some “sell-the-news” pressure on Ether after the ETF launches, which could “dry up soon” if market sentiment allows, wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.
Shares of crypto-related companies slumped, with Bitcoin proxy MicroStrategy Inc. dropping 6% and digital exchange operator Coinbase Global Inc. falling 3.6%.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out our podcasts.
Bloomberg News provided this article. For more articles like this please visit bloomberg.com.
