Bitcoin Surges While Layer-1s Stumble as Market Flows Turn Chaotic
Bitcoin's rally leaves major Layer-1 networks in the dust as capital movements grow increasingly erratic.
The King's Comeback
BTC is carving a path upward, defying broader market uncertainty. Its dominance reasserts itself, drawing liquidity while other sectors struggle for direction.
Layer-1 Lag
Ethereum challengers and alternative smart contract platforms face selling pressure. The 'flippening' narrative stalls as money rotates, not into the next big thing, but back into the original.
Flow Friction
Institutional moves look less like strategy and more like herd panic. Funds chase momentum one day and flee risk the next—a classic case of Wall Street applying old playbooks to a market that laughs at them.
The takeaway? When tides get messy, investors cling to the largest, hardest rock in the digital ocean. Everyone else is just getting washed around.
Crypto sector performance echoed the uneven tape. Despite renewed skepticism around AI, crypto Miners were the standout performers, rising 4.5% on the day. IREN, which makes up 24% of the index, gained 4.4% and helped lead the move. DeFi followed with a 1.93% gain, driven by strength in AAVE, ENA, and HYPE, which together account for 44% of the index and all closed higher.
On the downside, DePIN continued to struggle, falling -3.2%. The sector was dragged lower by FIL and GRASS, which dropped -6.2% and -7.2%, respectively. L1s were another surprise laggard, down -2.5% on the day. Even with BTC in the green, most L1 constituents finished lower, with SEI and BERA both posting losses of -9%.
Flows remain a headwind. After a strong $346.2 million day of ETF inflows on Dec. 9, momentum faded again with both BTC and ETH ETFs seeing outflows of -$154.2 million and -$42.3 million, respectively, yesterday. The lone bright spot continues to be SOL ETFs, which are still attracting low single- to low double-digit millions in daily inflows.
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