Powell's dovish remarks ignited risk markets, but cryptocurrencies have shown a divergent trend of 'strong ETH, weak BTC'—ETH surged to a historical high of $4888, while BTC faced resistance at $117,400 and failed to break above $120,000. This is not a coincidence; it must be dissected from the perspectives of capital flow, market logic, and asset characteristics.
First, let's look at the capital: ETFs have become a 'watershed', with ETH attracting funds while BTC is losing them.
Capital in the crypto market is currently 'moving house' with ETFs, which is the most direct driving force.
On the ETH side, there is a 'flood of capital': the US ETH spot ETF saw a net inflow of $337 million yesterday, with total assets breaking $30 billion for the first time. The two giants, BlackRock and Fidelity, invested $109 million and $118 million into ETH ETFs respectively—capital isn't leaving the giants; it's shifting from their BTC products to ETH products. This 'internal reallocation' essentially feeds ETH with 'ammunition', pushing prices upward.
On the BTC side, there is 'unexpected blood loss': the US BTC spot ETF actually saw a net outflow of $23.2 million. The key point is that BlackRock's IBIT (market-recognized 'anchor' for BTC) experienced a net outflow of nearly $200 million in just one day, which is a rare large redemption since its launch. Although funds have entered ETFs like Fidelity and ARK, they cannot counteract BlackRock's selling pressure, and the signal of institutional investors withdrawing from BTC is very clear.
Looking at the logic: the market narrative has changed; ETH is more in line with current 'appetite'.
Capital is following the ETF, indicating that the 'market narrative' that investors value has shifted direction.
First, the 'reallocation signal' is too straightforward. A giant whale, originally holding over 10,000 BTC and having made $1.1 billion, sold 300 BTC to shift to ETH; now, the ETH long positions are showing profits exceeding $100 million. Even the long-term 'loyalists' holding BTC are being swayed, and the market naturally follows suit: as 'sell BTC, buy ETH' transactions increase, BTC is pressured down while ETH gets pushed up.
Secondly, the 'yield characteristics' are markedly different. Nowadays, when people buy assets, they want to 'earn more'; ETH can be staked for yield, whereas BTC lacks this inherent function. For investors coming from traditional finance, ETH resembles 'an asset that can generate money', and ETH spot ETFs might even provide staking rewards, making them significantly more attractive than BTC.
Thirdly, the 'market sentiment' is vastly different. ETH has broken historical highs, and all holders are making money, with no trapped positions holding it back; as prices rise, the market increasingly wants to chase (FOMO sentiment). BTC is still a distance away from its historical high, with $120,000 being a psychological barrier that many are watching; quite a few are choosing to take profits, making it normal for the price to struggle.
There is also a minor influence: a dormant whale moved 3,500 BTC after three years; although they didn't say they were selling, the movement of long-term dormant assets inevitably creates market fear of selling, and BTC bulls are hesitant to be too aggressive.
To sum it up: it's not that BTC is weak; it's that ETH has seized the 'temporary advantage'.
In simple terms, it's about 'capital seeking the most attractive option'. Powell has provided ample liquidity to the market, but money isn't foolish—ETH now has this new ETF tool, can earn interest, and has reached new highs, naturally becoming a magnet for capital; in contrast, after BTC has risen significantly, some investors want to cash out and shift positions, leading to heavier short-term selling pressure.
However, this doesn't mean BTC is failing. The crypto market has always been 'fast-moving', and once the heat around ETH cools, or if BTC has new catalysts (like breaking key price levels or launching new applications), capital might shift back. The current divergence is merely a temporary 'rise and fall' phenomenon.
