ETH ETFs launched in a ‘weak market’ and could put pressure on Bitcoin – analyst
Bitcoin analyst space thinks that Ethereum exchange-traded funds (ETFs) have been launched too early, and if new capital does not enter the market, it could threaten the value of Bitcoin.
Charles Edwards, founder of Capriole Investments, told Cointelegraph that “it would be better to have a BTC ETF only in 2024”. They argue that the new Ether (ETH) ETFs are a distraction for investors already invested in Bitcoin (BTC).
“Institutional holders of current BTC ETFs think they should diversify a bit and buy ETH ETFs. Without new inflows into the overall market, this will create selling pressure on Bitcoin,” Edwards argued.
Since the spot Bitcoin ETF launched on Jan. 11, about $17.53 billion has flowed into 11 products, according to data from Farside Investors.
Bitcoin dominance has been fairly stable since Ether ETFs launched on July 23, rising 0.07% in the past 24 hours, according to TradingView data.
While the Spot Bitcoin ETF recorded net inflows of $78 million on July 23 – the first day of trading for the Spot Ether ETF – the following two days saw inflows of $44.5 million and $31.1 million, respectively.
Still, Edwards believes that “launching an ETH ETF into a weak or definitely not strong market” means uncertainty in capital allocation.
He also foresees that “there are no strong incentives for large price appreciation in the near term.”
At the time of publication, the price of Ether is down 9.2%. It traded at $3,178 since its launch on July 23, according to CoinMarketCap data.
Ether's price fell 10.4% since July 18, slightly lower than Bitcoin.
Futures traders also do not expect a sudden recovery, according to CoinGlass, if the price returns to $3,500, $1.32 billion is at risk in the short term.
However, other crypto analysts agree with Edwards that this “could look very different in a few weeks.”
“Like Bitcoin, the launch of spot ETH ETFs appears to be a sell-the-news event,” CryptoQuant head of research Julio Moreno wrote in a July 25 X post. Also similar to Bitcoin, analysts blame the Greyscale Ethereum Trust for the price decline.
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Michael van de Popp, founder of MN Trading, added: “The markets are reversing after this massive outflow has gone below $100 million.
“Ethereum is following the same path as Bitcoin after the approval of the ETF,” crypto analyst Croissant told his 116,600 X followers.
“The momentum seems to have been rewarded. The game plan is still the game plan from here, with one last drop before sending it to price discovery,” added crypto trader Kaleo.
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This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
