Over the past couple of days, U.S. Treasury yields have been bouncing around above 5%, and ETH has taken a much harder hit than Bitcoin. Bitcoin fell 2.6% in a day, while ETH dropped 5% to $2,371.
The reason is simple: it comes down to the numbers.
One of ETH’s strongest selling points over the past two years has been that it can earn interest. Stake your ETH and you can earn a little yield each year. That’s exactly what many institutions were drawn to: they saw it as a “digital asset that pays interest.”
But how much interest does it pay now? Just around 2.2% a year.
Now look at Treasuries. Even after falling today, the 10-year yield is still at 5.1%. You can park your money there and earn a return without worrying about crypto prices or getting caught in a sudden sell-off.
On one side, there’s 2.2% while you still have to bear the price risk. On the other, there’s 5.1% and nothing to worry about. If you were a fund manager, you’d obviously move money toward Treasuries.
Bitcoin doesn’t have this problem. It has never relied on interest; people buy it as digital gold. So when Treasury yields rise, ETH is the first to look less attractive by comparison.
That also explains why ETH ETFs saw $200 million in outflows in a single day a few days ago. It’s not that people have lost faith in Ethereum; at this price, holding it just doesn’t make financial sense.
Last night’s hotter-than-expected CPI revived expectations of rate hikes, and Treasury yields are only likely to climb higher. This gap won’t close anytime soon.
I previously said that BitMine, ETH’s biggest buyer, was close to stopping its purchases. Now there’s another factor: the reasons for new money to come in are also getting weaker.
That’s why ETH is in a tougher spot than Bitcoin. Technically, it hit a low of 2,332 today, with 2,315 as the key level below. If that breaks, 2,200 is next. To the upside, it first needs to reclaim 2,500 to show signs of recovery.
When Treasury yields really start coming down, ETH’s yield advantage can return. At that point, its rebound could be stronger than Bitcoin’s. $ETH #9月CPI来袭原油美债走势如何
The reason is simple: it comes down to the numbers.
One of ETH’s strongest selling points over the past two years has been that it can earn interest. Stake your ETH and you can earn a little yield each year. That’s exactly what many institutions were drawn to: they saw it as a “digital asset that pays interest.”
But how much interest does it pay now? Just around 2.2% a year.
Now look at Treasuries. Even after falling today, the 10-year yield is still at 5.1%. You can park your money there and earn a return without worrying about crypto prices or getting caught in a sudden sell-off.
On one side, there’s 2.2% while you still have to bear the price risk. On the other, there’s 5.1% and nothing to worry about. If you were a fund manager, you’d obviously move money toward Treasuries.
Bitcoin doesn’t have this problem. It has never relied on interest; people buy it as digital gold. So when Treasury yields rise, ETH is the first to look less attractive by comparison.
That also explains why ETH ETFs saw $200 million in outflows in a single day a few days ago. It’s not that people have lost faith in Ethereum; at this price, holding it just doesn’t make financial sense.
Last night’s hotter-than-expected CPI revived expectations of rate hikes, and Treasury yields are only likely to climb higher. This gap won’t close anytime soon.
I previously said that BitMine, ETH’s biggest buyer, was close to stopping its purchases. Now there’s another factor: the reasons for new money to come in are also getting weaker.
That’s why ETH is in a tougher spot than Bitcoin. Technically, it hit a low of 2,332 today, with 2,315 as the key level below. If that breaks, 2,200 is next. To the upside, it first needs to reclaim 2,500 to show signs of recovery.
When Treasury yields really start coming down, ETH’s yield advantage can return. At that point, its rebound could be stronger than Bitcoin’s. $ETH #9月CPI来袭原油美债走势如何