According to analysts at K33 Research, the introduction of Ethereum (ETH) exchange-traded funds (ETFs) could potentially outshine Bitcoin (BTC) in the weeks after their launch in the United States. The anticipated launch date for these ETFs is July 8th. The analysts claim that these ETFs are a significant opportunity for ETH’s price, while Bitcoin may face selling pressure as $8.5 billion worth of it is returned to creditors of the collapsed Mt. Gox exchange. This information was shared in a report by K33 analysts Vetle Lunde and David Zimmerman on July 2nd.
For more than a year, ETH has been underperforming compared to Bitcoin, which has experienced market-leading gains due to over $14 billion in flows to Bitcoin exchange-traded products this year. Lunde and Zimmerman predict that ETH will stumble initially after the ETFs are launched, but they expect inflows to the funds to boost ETH’s price, similar to what happened with Bitcoin.
Lunde wrote, “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.” However, the market appears to disagree with the analysts’ position, as evidenced by Ether futures trading at a relative discount to Bitcoin futures and the price of ETH compared to Bitcoin trading at a rate of 1 ETH to 0.055 BTC.
Over the past 12 months, the value of ETH has steadily declined compared to Bitcoin, reaching a yearly low of 0.045 on May 24th. However, the price of Ether relative to Bitcoin quickly reversed following the unexpected approval of Ether ETFs by the SEC, reaching its present value of 0.055. This surprising decision by the SEC surprised analysts.
Despite this, Lunde and Zimmerman noted that Ether futures open interest remains high, indicating that many traders are taking on significant leverage to speculate on ETH’s potential price movement leading up to the ETF launch.
In conclusion, the launch of ETH ETFs is expected to have a positive impact on ETH’s price, potentially surpassing Bitcoin’s performance. However, the market currently does not share this sentiment, as indicated by the relative pricing of Ether futures and the price of ETH compared to Bitcoin. Nevertheless, traders are showing strong interest in Ether futures leading up to the ETF launch.