@bertonsteele
BTC and ETH display different elasticity to ETF net inflows. BTC often acts as the liquidity benchmark, absorbing flows with smaller percentage price moves, while ETH may react with higher elasticity due to lower market depth. Building an elasticity model requires regressing returns of each asset against normalized ETF net flows, adjusting for volatility. Comparing coefficients reveals which asset delivers more “bang for each dollar inflow.” Typically, ETH shows higher marginal responsiveness, but BTC offers stability. Understanding this asymmetry allows traders to overweight assets more sensitive to ETF-driven flows during strong inflow cycles.
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