While Ether has underperformed Bitcoin for over a year, crypto pundits say this is about to change once spot ETH exchange-traded funds (ETFs) go live on United States exchanges.
The Ethereum ETFs will further the legitimacy and overall acceptance of the second-largest cryptocurrency and boost its price. In the meantime, Bitcoin (BTC) faces headwinds from distributions by the failed crypto exchange Mt. Gox.
Expert Opinion: ETH Expected To Outrun BTC Post-ETF
The latest analysis from K33 Research suggests an imminent change in market dynamics, with Ethereum taking the lead over Bitcoin.
K33 analysts Vetle Lunde and David Zimmerman said in a July 2 report that Ethereum is primed to get its first US-listed spot exchange-traded fund (ETF) following the SEC’s approval of key filings in May, attracting a huge wave of new institutional investors into ETH.
Meanwhile, the Bitcoin price faces downside risk this month due to potential selling pressure from the creditors of defunct Bitcoin exchange Mt. Gox. Creditors are set to receive 142,000 BTC worth about $8.6 billion at current prices.
“The chickens of 2014 have come home to roost,” said K33 Research in the Tuesday report. “We expect net selling pressure to burden Bitcoin in an otherwise dry summer market, widening the chop suey range until rosier days arise as the leaves turn orange.”
The analysts, however, observed that the market still “stubbornly” disagrees with their position, citing Ether futures trading at a relative discount to Bitcoin futures.
For the past 12 months, the ETH/BTC ratio has been on a steady downtrend, slipping to a yearly low of 0.045 on May 24. That’s when shocking news broke that the U.S. SEC would soon greenlight ETH ETFs, propelling the ratio back up to 0.055 as of publication time.
Odds Are Stacked In Ether’s Favor
BTC has recorded market-leading gains buoyed by nearly $15 billion in inflows into its spot ETFs in 2024. Though the crypto market’s bullish momentum has waned since April, K33 believes that Ethereum ETFs will absorb between 0.75% and 1% of all ETH in circulation within their first five months on the market.
K33 Research strategists said they expect the price of ETH to “stumble immediately following the launch of the ETFs.” Still, they noted that, much like what happened with Bitcoin in January, Ether products should attract enormous inflows, creating significant buying pressure on ETH.
“ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate,” K33’s Lunde added, “and I firmly view current ETH/BTC prices as a bargain for the patient trader.”
This forecasted comeback by Ether against Bitcoin highlights the growing prominence and investor confidence in the leading smart contract network, positioning it as a key player in the crypto market.
Spot Ethereum exchange-traded funds (ETFs) are expected to debut the week of July 15 as would-be ETF issuers are making notable progress with the SEC, according to Nate Geraci, president of The ETF Store.
“Potential final S-1s by July 12th…would theoretically mean launch week of July 15th,” Geraci posited.
