The launch of upcoming U.S.-based spot Ether ETFs could significantly bolster Ethereum’s price, while Bitcoin faces potential sell pressure due to repayments to Mt. Gox creditors.
Spot Ether ETFs: A Potential Game-Changer?
K33 Research analysts have indicated that the launch of spot Ether exchange-traded funds (ETFs) could enable Ethereum to outperform Bitcoin in the weeks following its debut in the United States. These ETFs, anticipated to launch as soon as July 8, are described as a “golden egg” for Ether (ETH) price action. Conversely, Bitcoin (BTC) might experience sell pressure as $8.5 billion worth of BTC is returned to creditors of the defunct Mt. Gox exchange starting this week, according to K33 analysts Vetle Lunde and David Zimmerman in their July 2 report.
Ether’s Performance Relative to Bitcoin
For over a year, Ether has underperformed compared to Bitcoin. Bitcoin has seen market-leading gains, bolstered by over $14 billion in inflows to its spot ETFs in 2024. However, Lunde and Zimmerman believe that the launch of spot Ether ETFs will likely strengthen ETH’s price, even though ETH might “stumble immediately following the launch of the ETFs.” They draw a parallel to Bitcoin’s performance, where inflows to spot funds eventually boosted BTC’s price.
“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. The analysts maintain a bullish outlook on ETH, anticipating net inflows equivalent to 0.75-1% of ETH’s circulating supply in the five months following the ETF launch.
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Market Skepticism and Ether’s Decline
Despite the optimistic outlook from K33 analysts, the market remains skeptical. According to the latest crypto news, Ether futures are trading at a relative discount to Bitcoin futures, and the ETH price relative to Bitcoin is trading at a rate of 1 ETH to 0.055 BTC. For the past 12 months, ETH’s value has been declining compared to Bitcoin, hitting a yearly low of 0.045 on May 24.
The price of Ether relative to Bitcoin reversed quickly after the SEC’s unexpected approval of Ether ETFs, which surprised analysts and saw ETH/BTC tick up to its current value of 0.055, based on TradingView data. Despite this, Lunde and Zimmerman noted that Ether futures open interest remains “relentless,” indicating that many traders are leveraging heavily on ETH’s potential price action ahead of the ETF launch.
The Impact of Spot Ether ETFs
The crypto update states that the upcoming spot Ether ETFs are expected to be a crucial factor in Ethereum’s price dynamics. These ETFs provide a new avenue for investment and could drive significant inflows into ETH. As these funds accumulate, the price of Ether could see substantial support, potentially reversing its recent underperformance relative to Bitcoin.
The launch of these spot Ether ETFs is a significant event in the crypto market, marking a potential shift in investor sentiment and market dynamics. With Ether ETFs poised to debut soon, the market is closely watching for their impact on Ethereum’s price and overall market performance.
The BIT Journal concludes the reports from news sources that while Bitcoin may face challenges due to Mt. Gox repayments, the introduction of spot Ether ETFs offers a promising outlook for Ethereum. As these ETFs come online, they are inclined to attract substantial investment, potentially boosting ETH’s price and altering the current market dynamics. The crypto community, investors, and analysts will be keenly observing these developments, making this one of the latest crypto news highlights to watch.
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