Markets
July Spot Ether ETF Launch Will Help Token Overtake Bitcoin
- Ether ETFs will help the cryptocurrency outperform bitcoin, Kaiko says.
- It is estimated that once the funds are launched this month, the trend will continue to accelerate.
- Wall Street is bullish on Ether, with analysts focusing on favorable supply and demand factors.
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With the anticipated debut of spot ether exchange-traded funds, the token should strengthen its performance against bitcoin research from analytics firm Kaiko.
He noted that the ether-to-bitcoin ratio, a measure comparing the two major cryptocurrencies, has increased significantly since regulators approved ETFs in May: The ratio increased from 0.045 to 0.05, and remained elevated, Kaiko said.
In other words, it takes more bitcoin to buy one ether token, and the trend should only strengthen once ETFs come online, which is expected to happen. starting next weekthe firm said. While the price of ether has fluctuated in both directions since May, the report indicates that the token is poised for a rally.
Kaiko
CME Group added that interest in ether drove cryptocurrency trading in the second quarter.
“Traders began to utilize Ether/Bitcoin Ratio futures more than ever in Q2 as Ether outperformed Bitcoin. Over $260 million in notional value traded,” the company wrote Tuesday. “Ether futures reached a record open interest of 7.6K contracts ($1.3B in notional value) on June 24 and a record $2.85B traded on May 21.”
The upcoming launch of ether ETFs has been celebrated on Wall Street, partly due to the success they have seen this year bitcoin spot funds.
However, some have noted that ether has hard-to-beat features that should increase demand, such as an annual return and more functionality that bitcoin does not have.
In addition to demand factors, SynFutures CEO Rachel Lin stressed that the rally would stem from a supply shift that would cause a tightening of the bitcoin-ether price ratiohe said in May.
“Overall, I know the market is bullish on Ethereum right now, but not enough. Now that the ETH spot ETF has been approved, all indicators point to a massive rally in ETH in the coming months,” Lin said after the funds were approved.
According to his estimates, ether could reach $22,500 this cycle, an increase of 550% from current levels.
Furthermore, these new ETFs should be less exposed to the headwinds faced by spot bitcoin ETFs. For example, Standard Chartered has pointed out that large outflows are less likely, given minor reasons for forced sale.
Ether was down 1.02% at $3,450.22 as of 1:00 PM ET on Tuesday. It is up more than 51.79% for the year.