Markets
Spot Ether ETF Launch in July Will Help Token Outperform Bitcoin
- Ether ETFs will help the cryptocurrency outperform bitcoin, Kaiko said.
- Once these funds are launched this month, the trend should continue to deepen, he believes.
- Wall Street is bullish on ether, with analysts focusing on supply and demand tailwinds.
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The expected debut of spot ether exchange-traded funds is expected to boost the token’s performance against bitcoin, according to research from the analysis company Kaiko.
He noted that the ether-to-bitcoin ratio, a metric that compares the two major cryptocurrencies, has increased significantly since regulators approved ETFs in May:the ratio went from 0.045 to 0.05 and remained high, Kaiko said.
In other words, it takes more bitcoins to buy one ether token, and the trend should only increase when ETFs come online, which is likely to happen. from next weekthe company said. Even though the price of ether has been swinging back and forth since May, the ratio indicates that the token is poised to rise.
Kaiko
CME Group added that interest in ether boosted cryptocurrency trading in the second quarter.
“Traders began using Ether/Bitcoin ratio futures more than ever in the second quarter as Ether’s performance improved relative to Bitcoin, with over $260 million in notional value traded,” the company wrote Tuesday. “Ether futures reached a record open interest of 7.6K contracts ($1.3B notional) on June 24 and a record $2.85B traded on May 21.”
The upcoming launch of ether ETFs has been celebrated on Wall Street, thanks in part to the success of this year’s ether ETF. bitcoin spot funds.
Still, some have noted that ether has hard-to-pass features that should drive demand, such as an annual yield and more features — offerings never seen in bitcoin.
Besides demand factors, SynFutures CEO Rachel Lin pointed out that the upside would come from a a change in supply that would cause the Bitcoin/Ether price ratio to tightenshe said in May.
“Overall, I know the market is bullish on Ethereum right now, but not enough. Now that the ETH spot ETF is approved, all indicators point to a massive surge in ETH in the coming months,” Lin said after the funds were approved.
According to his estimates, ether could reach $22,500 this cycle, a 550% increase from current levels.
Additionally, these new ETFs should be less exposed to the headwinds faced by spot bitcoin ETFs. For example, Standard Chartered has pointed out that major releases are less likely, given smaller reasons for forced sale.
Ether was down 1.02% at $3,450.22 as of 1 p.m. ET Tuesday. It is up more than 51.79% for the year.