Markets
Spot Ether ETF Launch in July Will Help Token Outperform Bitcoin
- Ether ETFs will help the cryptocurrency outperform bitcoin, Kaiko says.
- When those funds launch this month, the trend is likely to continue deepening, he estimated.
- Wall Street is bullish on ether, with analysts focusing on demand and supply.
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The anticipated debut of spot ether exchange-traded funds should boost the token’s performance against bitcoin, according to to look for from the analysis company Kaiko.
He noted that the ratio of ether to bitcoin, a measure that compares the two leading cryptocurrencies, has increased significantly since regulators approved ETFs in May: The ratio increased 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 is only likely to deepen once ETFs go live, which is likely to happen. next weekthe company said. While the price of ether has swung both ways since May, the ratio indicates that the token is poised for a rally.
Kaiko
CME Group added that interest in ether boosted cryptocurrency trading in the second quarter.
“Traders began utilizing Ether/Bitcoin Ratio futures more than ever in Q2 as ether outperformed bitcoin. Over $260 million in notional value was traded,” the firm wrote on Tuesday. “Ether futures reached a record open interest of 7,600 contracts ($1.3 billion notional) on June 24 and a record $2.85 billion traded on May 21.”
The upcoming launch of ether ETFs has been celebrated by Wall Street, in part due to the success achieved over the year spot bitcoin funds.
However, some have noted that ether comes with hard-to-approve features that are likely to increase demand for it, such as an annual yield and more functionality — offerings not seen in bitcoin.
In addition to demand factors, SynFutures CEO Rachel Lin highlighted that the upside would come from a change in supply that would cause a narrowing of the bitcoin-ether price ratioshe said in May.
“Overall, I know the market is bullish on Ethereum right now, but not bullish enough. Now that the spot ETH ETF has been approved, all indicators point to a massive bull run for ETH in the coming months,” Lin said after the funds were approved.
According to his estimate, ether could reach $22,500 this cycle, a 550% increase from current levels.
Furthermore, these new ETFs should be less exposed to the headwinds faced by spot bitcoin ETFs. For example, Standard Chartered noted that large exits are less likely, given minor reasons for forced sale.
Ether fell 1.02% to $3,450.22 as of 1 p.m. ET on Tuesday. It is up more than 51.79% year-to-date.