The past few days have witnessed significant positive net investments in BTC ETFs, following a period of reduced selling in GBTC. This trend has been a key factor in boosting BTC's price and may further elevate it if the robust inflows persist. Historically, BTC has not reached a new all-time high (ATH) prior to a BTC halving event. Should it achieve a new ATH this time, it would mark a novel phase attributed to the influence of ETFs.
The potential ETF approval could significantly affect Ethereum (ETH) in the coming months, possibly leading to a surge in ETH buying. This contrasts with the sell-off seen with BTC after its ETF approval, as the market might not react similarly with ETH due to learned experiences. Instead, ETH might see continued investment post-approval.
Other altcoins may temporarily lag behind BTC and ETH due to this ETF-driven focus but could gain momentum later. Medium-term prospects for altcoins look promising due to several factors: their valuations often follow ETH's lead; the Total Value Locked (TVL) in DeFi is affected by ETH and L1/L2 token prices; and increased valuations for new tokens could boost airdrop values, drawing more investment into these protocols and elevating their Fully Diluted Valuations (FDVs).
BTC ETF inflows can start a positive feedback loop within the broader crypto ecosystem. However, this effect could reverse with declining ETF inflows. The allure of rising prices, driven by FOMO, underscores the importance of monitoring ETF inflows, which are currently guiding BTC's short-term price trajectory.
