Research: Ethereum to Beat Bitcoin with ETF Launch
03 Jul, 2024 ● Crypto people
The introduction of spot Ether exchange-traded funds (ETFs) could lead to the cryptocurrency outperforming Bitcoin in the weeks following their debut in the United States, according to K33 Research analysts.
These ETFs, anticipated to launch as early as July 8, are seen as a “golden egg” for Ether's price movement.
In contrast, Bitcoin is expected to encounter sell pressure as $8.5 billion worth is returned to creditors of the now-defunct exchange Mt. Gox starting this week, K33 analysts Vetle Lunde and David Zimmerman mentioned in a July 2 report.
For over a year, Ether has lagged behind Bitcoin, which has seen market-leading gains fueled by over $14 billion in flows to its spot ETFs in 2024.
Lunde and Zimmerman noted it’s likely for ETH’s price to “stumble immediately following the launch of the ETFs” but suggested that inflows to the spot funds would probably boost ETH’s price, similar to what happened with Bitcoin.
“ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate, and I firmly view current ETH/BTC prices as a bargain for the patient trader,” Lunde wrote.
He elaborated: “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 pointed out that the market still “stubbornly” disagrees with their stance, citing 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.
Over the past year, ETH’s value has been steadily declining compared to Bitcoin, hitting a yearly low of 0.045 on May 24.
The price of Ether relative to Bitcoin quickly rebounded following the SEC’s unexpected approval of Ether ETFs, surprising analysts and raising ETH/BTC to its current value of 0.055, as per TradingView data.
Despite this, Lunde and Zimmerman observed that Ether futures open interest remained “relentless,” indicating that many traders are using high leverage to bet on ETH’s potential price movement leading up to the ETFs' launch.
Sources:
https://decrypt.co/238182/ethereum-soar-versus-bitcoin-after-etf-approvals
