Crypto Markets Erase Weekend Gains as Rising Treasury Yields Dampen Risk Assets

Bitcoin and Ethereum caught a boost over the weekend after the SEC approved options trading for Bitcoin ETFs.

Crypto markets turned sharply lower on Monday, erasing weekend gains fueled by the SEC’s approval of options trading for Bitcoin exchange-traded funds (ETFs).

On Oct. 18, the SEC granted accelerated approval to 11 spot Bitcoin ETFs to list and trade options on the New York Stock Exchange (NYSE). This move gives investors a new way to hedge their exposure to Bitcoin through listed derivatives, potentially boosting institutional interest in the world's largest cryptocurrency.

Bitcoin (BTC) dropped 1.5% to $67,000, while Ethereum (ETH) reversed into the red after trading as high as $2,760. Solana (SOL) rose 4%, while Polkadot (DOT) dipped 3%.

The approval also coincided with a surge in total net flows for the U.S.-based spot Bitcoin ETFs, which crossed the $20 billion mark on Oct. 17, highlighting the growing institutional demand for Bitcoin.

This comes as Bitcoin dominance, the ratio of Bitcoin’s market cap to the overall crypto market cap, reached 58%, its highest level since April 2021. The global crypto market cap is $2.3 trillion, with Bitcoin alone accounting for $1.34 trillion.

BTC ETF Inflows Remain Strong

Spot Bitcoin ETFs have been a significant driver of market sentiment this week, with consistent inflows.

On Oct. 19, Bitcoin ETFs logged $203 million in inflows, marking a six-day winning streak.

The combined value of Bitcoin held by twelve funds stands at $66.1 billion, surpassing the previous record of $62.6 billion set in early June, according to SoSoValue data. This figure now represents 4.89% of Bitcoin's total market cap.

“With the SEC’s approval for BTC ETF options to be listed on the NYSE, we believe this will provide the ETF with the needed liquidity to attract sustainable inflows,” QCP Capital analysts wrote.

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