ETH Poised to Outperform BTC Following Launch of Spot Ethereum ETFs, K33 Research
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Highlights:
- Analysts predict the launch of Ethereum ETFs will boost ETH performance over Bitcoin.
- ETH’s value against BTC reached a yearly low but rebounded after the SEC approved 19b-4 forms from eight issuers.
- ETH ETFs are anticipated to launch on July 15, predicts Nate Geraci.
The launch of spot Ethereum (ETH) exchange-traded funds (ETFs) is expected to help ETH perform better than Bitcoin (BTC) in the weeks after they begin trading in the United States, K33 analysts David Zimmerman and Vetle Lunde said in a July 2 report.
According to the analysts, the ETFs are a “golden egg” for the Ethereum price. Meanwhile, Bitcoin may face selling pressure as $8.5 billion worth of BTC is returned to creditors of the now-defunct Mt. Gox exchange starting this week. ETH has been underperforming Bitcoin for over a year despite Bitcoin’s $14 billion inflow into exchange-traded products this year.
Governments are selling into the summer, while open interest in ETH is surging towards record levels with the ETF launch drawing near.https://t.co/PdJIFeikbT
— K33 Research (@K33Research) July 2, 2024
Zimmerman and Lunde anticipate some initial turbulence for ETH after the ETFs launch. However, they believe that inflows into the funds will eventually boost ETH’s price over time. Lunde also mentioned that ETFs could act as a strong catalyst for ETH’s relative strength over the summer. He even described current ETH/BTC prices as a bargain for patient traders.
The analysts noted:
“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.”
However, the analysts observed that the market still “stubbornly” disagrees with their position, noting that Ether futures are trading at a discount relative to Bitcoin futures. They also highlighted that the price of ETH relative to Bitcoin is currently at a rate of 1 ETH to 0.055 BTC.
Ethereum Rebounds Against Bitcoin
ETH has steadily decreased over the past 12 months compared to Bitcoin. It dropped to a yearly low of 0.045 on May 24. The price of Ether compared to Bitcoin quickly rebounded unexpectedly after the SEC approved Ether ETFs. This surprised the community and pushed the ETH/BTC rate up to its current value of 0.055, according to TradingView.
Lunde and Zimmerman pointed out that Ether futures open interest remains high, suggesting many traders are heavily leveraging to speculate on ETH’s potential price movements before the ETF launch. They see the ETFs as a prime opportunity for ETH to strengthen its position relative to Bitcoin in the market.
Spot Ethereum ETFs Projected to Gain $5 Billion in Six Months
In a research report on Monday, crypto exchange Gemini stated that once spot ETH ETFs are approved for trading in the U.S., they could attract up to $5 billion in net inflows during the first six months.
Additionally, these inflows could bring total assets under management for spot Ethereum ETFs to $13-15 billion within the same period. Gemini noted that Ether’s market value relative to Bitcoin is near multiyear lows, and the inflows could boost Ether’s relative position.
The exchange stated
“Given the AUM comparable in international ETF markets, robust on-chain dynamics, and differentiating factors such as a thriving stablecoin environment, there is favourable risk-reward of an ETH catch-up trade in the months to come.”
Ethereum ETFs Launch Could Take Place on July 15, Geraci
President of The ETF Store Nate Geraci predicts that the Ethereum ETFs will go live by July 15. Bloomberg ETF analyst Eric Balchunas noted that the US SEC has set July 8 as the deadline for ETF issuers to amend their S-1 forms. Geraci mentioned that after the revised S-1 submissions, the SEC’s final approval could come by July 12. Thus, Ether ETF trading is expected to start on Monday, July 15.
Wen spot eth ETF?
BBG sticking w/ mid-July.
Amended S-1s due July 8th.
Potential final S-1s by July 12th.
Would theoretically mean launch week of July 15th.
via @emily_graffeo @olgakharif pic.twitter.com/NG8xhtCP21
— Nate Geraci (@NateGeraci) July 3, 2024
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