The launch of spot Ether exchange-traded funds (ETFs) could see the cryptocurrency outperform Bitcoin in the weeks after they go live in the United States, say K33 Research analysts.
The ETFs, expected to launch as soon as July 8, are a “golden egg” for Ether price action, while Bitcoin is set to face sell pressure as $8.5 billion worth is returned to creditors of collapsed exchange Mt. Gox starting this week, K33 analysts Vetle Lunde and David Zimmerman said in a July 2 report.
Ether has underperformed relative to Bitcoin for over a year, with BTC posting market-leading gains bolstered by over $14 billion in flows to its spot ETFs in 2024.
Lunde and Zimmerman said it’s reasonable to expect the price of ETH to “stumble immediately following the launch of the ETFs” but noted that — much like what later happened with Bitcoin — inflows to the spot funds would likely bolster ETH’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.
“We maintain a bullish ETH outlook in anticipation of net inflows equivalent to 0.75-1% of ETH’s circulating supply in the five months following the launch.”
The analysts said the market still “stubbornly” disagrees with their position, pointing to Ether futures trading at a relative discount to Bitcoin futures and the price of ETH relative to the price of Bitcoin trading at a rate of 1 ETH to 0.055 BTC.
For the past 12 months, ETH’s value has been charting a steady decline compared to Bitcoin, falling to a yearly low of 0.045 on May 24.
The price of Ether relative to Bitcoin reversed quickly following the SEC’s sudden decision to approve Ether ETFs, which surprised analysts and saw ETH/BTC tick up to its present value of 0.055, according to TradingView data.
Despite this, Lunde and Zimmerman said Ether futures open interest was “relentless,” showing that many traders are taking on high amounts of leverage to bet on ETH’s potential price action heading into the launch of the ETFs.
