Bitcoin’s meteoric rise toward the coveted $100,000 mark has slowed, leaving investors jittery as new market developments unfold. While institutional players like MicroStrategy continue to back Bitcoin, the broader crypto market has seen capital flows shift to alternative assets.
Chris Newhouse, Director of Research at Cumberland Labs, told Bloomberg, “Institutional buying remains robust, but the market is diversifying. Bitcoin’s dominance is facing competition.”
U.S. Government Transfers $2 Billion in Bitcoin
On Monday, market sentiment took a hit following a report by blockchain analytics firm Arkham. The U.S. government transferred $2 billion worth of Bitcoin seized in the infamous Silk Road case to Coinbase.
The move has raised alarm bells across the market. Speculation is rife that these assets could soon hit the open market, potentially causing a significant price drop. This uncertainty has tempered the optimism of Bitcoin bulls, who were counting on the cryptocurrency to cross $100K.
Ether ETFs Surge Amid Bitcoin Slowdown
As Bitcoin’s momentum slows, other cryptocurrencies are stepping into the spotlight — especially Ethereum. Ether-based exchange-traded funds (ETFs) are seeing record inflows, with Grayscale Ethereum Trust (ETHE) and iShares Ethereum Trust (ETHA) posting gains of over 8% last week. Leveraged Ether ETF (ETHU) outperformed the market with a staggering 16.9% weekly return.
“Ether’s volatility is higher than Bitcoin’s, but it’s attracting more attention due to ETF growth and increasing market confidence,” said Jake Ostrovskis, a trader at Wintermute OTC.
Options Market Signals Bearish Sentiment
In the options market, demand for Bitcoin downside protection has spiked, with traders hedging against potential corrections this month. Open interest for Bitcoin futures remains muted following recent liquidations, signaling caution among investors.
Meanwhile, Ethereum futures and options have shown greater volatility, with Ether’s volatility in the 81st percentile compared to Bitcoin’s 64th percentile.
What’s Next for Bitcoin?
While Bitcoin continues to trade near its peak at $99K, all eyes are on macroeconomic factors and government moves that could influence the market. Analysts are cautiously optimistic but warn that any large-scale Bitcoin sell-off from the U.S. government could derail the $100K dream.
For now, investors are exploring opportunities in alternative assets, particularly Ethereum, as it positions itself as the market’s rising star.
Bitcoin’s $100K Dream Stumbles: U.S. Government Sparks Crypto Shockwaves was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.