Crypto News- After the ETF is introduced, Ethereum will likely outshine Bitcoin
Crypto News– According to K33 Research analysts, the launch of spot Ether exchange-traded funds (ETFs) in the United States could lead to Ethereum outperforming Bitcoin in the weeks following their debut.
These ETFs are expected to launch as soon as July 8 and are seen as a golden egg for Ether. Meanwhile, Bitcoin is expected to face selling pressure as $8.5 billion worth of Bitcoin is returned to creditors of the collapsed exchange Mt. Gox starting this week, as mentioned by K33 analysts Vetle Lunde and David Zimmerman in a July 2 report.
For over a year, Ether has underperformed relative to Bitcoin, with BTC posting market-leading gains, supported by over $14 billion in flows to its spot ETFs in 2024.
Luvnde and Zimmerman acknowledge that it’s reasonable to expect ETH’s price to stumble immediately following the launch of the ETFs. However, they note that, similar to what happened with Bitcoin, inflows to the spot funds will likely bolster ETH’s price over time.
ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate. I firmly view current ETH/BTC prices as a bargain for the patient trader, Lunde wrote.
We maintain a bullish ETH outlook in anticipation of net inflows equivalent to 0.75-1% of ETH’s circulating supply in the five months following the launch.
The analysts added that the market still stubbornly disagrees with their position, pointing to Ether futures trading at a relative discount to Bitcoin futures and the price of ETH relative to Bitcoin trading at a rate of 1 ETH to 0.055 BTC.
The price of Ether relative to Bitcoin quickly reversed after the SEC’s sudden decision to approve Ether ETFs, which caught analysts off guard. This led to ETH/BTC rising to its current value of 0.055, according to TradingView data.
Despite this development, Lunde and Zimmerman noted that Ether futures open interest remained relentless. This indicates that many traders are taking on significant leverage, betting on ETH’s potential price movement as the ETF launch approaches.
FAQs
What is an ETF and why is it significant for Ethereum?
An ETF, or exchange-traded fund, is a type of investment fund that is traded on stock exchanges, much like stocks. It allows investors to buy shares that represent a portion of the underlying asset, in this case, Ether. The significance of an ETF for Ethereum lies in its potential to attract institutional investors and increase liquidity, which can drive up the price of Ether.
Why is Ethereum expected to outperform Bitcoin after the ETF launch?
Analysts believe that the approval and launch of spot Ether ETFs will lead to significant inflows of capital into Ethereum. This increased demand is expected to bolster Ethereum’s price, potentially leading to it outperforming Bitcoin, especially as Bitcoin faces selling pressure from other factors such as the Mt. Gox creditor repayments.
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