Bitcoin slid on Friday to end what should have been a momentous week for the cryptocurrency, with the launch of 11 bitcoin ETFs in the U.S. after a years long battle for institutional acceptance of the asset.
The price of bitcoin dropped nearly 6% to $44,022.22, according to Coin Metrics, pulling most of the crypto market into the red, with some notable exceptions. On Thursday, it briefly surged to $49,058.48, its highest level since December 2021. It wavered over the flat line for the week.
Meanwhile, ether hovered under the flat line, trimming earlier gains. It has risen 18% this week to highs not seen since May 2022, as investors rotated into it and out of bitcoin following the widely expected SEC of approval of bitcoin ETFs.
“In our view, the crypto market has already moved to the next narrative, with ETH rallying more than bitcoin, likely on the expectation that crypto’s second largest token could also see an ETF approval,” Alex Saunders, an analyst at Citi, said in a note Friday.
The SEC is due to give decisions on spot ETH ETF applications beginning in May. BlackRock, Invesco, Ark and VanEck are among the firms in line for approval, as well as Grayscale, which is seeking to convert its existing Ethereum Trust (ETHE) into an ETF.
Ether lagged bitcoin in 2023, rising just 90% compared to bitcoin’s 157%.
Many had expected the long awaited bitcoin ETF approvals to be a sell-the-news event, with investors and miners sitting on high unrealized profits as the ETF narrative drove bitcoin up more than 60% in just the past three months. Market participants across the board agree the bitcoin price will benefit from ETFs, but it may take some time to play out as newcomers to crypto become more familiar with the asset and enter the market gradually.
“Bitcoin’s potential for inclusion in portfolios to take on extra prominence, though any widespread inclusion in portfolios is still some way off, in our view,” Saunders said.
Elsewhere, litecoin, whose value proposition is similar to the original bitcoin vision of a medium for everyday payments, was another bright spot in the crypto market Friday and is on pace for a 14% weekly gain.
Crypto equities fell with bitcoin. Coinbase and Microstrategy were lower by 5% and 7%, respectively. Even the miners extended big losses from Thursday. CleanSpark dropped 10%, Iris Energy tumbled more than 14%, Marathon Digital slid 12.5% and Riot Platforms retreated 6%.
—CNBC’s Michael Bloom and Nick Wells contributed reporting.