Bitcoin, ether benefit as traders seek safety of largest tokens
Cryptocurrency traders are shifting capital toward Bitcoin and Ether as altcoins struggle to maintain momentum. Market analysts suggest that Bitcoin's integration into institutional financial products like ETFs provides a stability that smaller tokens currently lack.
Why it matters
The maturation of Bitcoin as an institutional asset class is fundamentally changing how capital flows within the broader digital asset market.
Crypto appears to be moving to the perceived safety of the biggest tokens, with bitcoin and ether ETH $ 1,903.32 the only CD20 members in positive territory. Zaheer Ebtikar, the chief strategy officer at crypto neobank Plasma, told CoinDesk altcoins are struggling “without aggressive support from bitcoin momentum.”
Altcoin open interest has fallen about 15% over the past month while bitcoin has gained roughly 8%, Ebtikar said. CoinMarketCap’s Altcoin Season index fell one point from Wednesday to 42/100.
“Because Bitcoin has moved into capital markets plumbing with ETFs, basis trading, institutional hedging, and collateral, that flow doesn't need a rally to justify itself. However, most of the altcoin market hasn't made that transition yet,” Ebtikar said.
The divergence, according to Ebtikar, results from projects failing to clearly define how value accrues, making them unable to justify investors’ exposure to their tokens during market declines.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in