Ethereum Surpasses Bitcoin After ETF Launch: K33 Research
Spot Ether (ETH) could see the cryptocurrency outperform Bitcoin (BTC) in the weeks after the launch of exchange-traded funds (ETFs) in the United States, according to K33 Research analysts.
As the ETF, which is expected to launch on July 8, is a “golden egg” for the price of ETH, Bitcoin is about to face selling pressure for the $8.5 billion exchange MT Gox as lenders return from this week, K33 analysts Vetle Lunde and David Zimmerman said in a July 2 report.
ETH has underperformed Bitcoin for more than a year, with the latter posting market-leading gains that have added more than $14 billion in trading volume to bitcoin exchanges this year.
While Lunde and Zimmerman expect ETH to “immediately stumble following the launch of the EFF” – as happened later with Bitcoin – they noted that its entry into the currency would strengthen ETH's value.
“ETFs are encouraging relative ETH strength as the summer progresses and flows accumulate, and I view the current ETH/BTC prices as a bargain for the patient trader,” Lunde wrote.
We expect to see a net ETH supply equivalent to 0.75-1% ETH distribution in the five months after launch.
According to the analysts, the market still “stubbornly” disagrees with their position, pointing to the relative discount for Ether futures trading in Bitcoin futures and the price of ETH in the Bitcoin trading price of 1 ETH to 0.055 BTC.
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The price of ETH has been in constant decline against Bitcoin for the past 12 months, falling to a yearly low of 0.045 on May 24.
Ether price moves faster relative to Bitcoin The SEC's sudden decision to approve an Ether ETF surprised analysts and saw ETH/BTC tick at a current price of 0.055 on TradingView data.
Despite this, Lunde and Zimmerman said Ether futures open interest was “relentless,” indicating that many traders are taking significant leverage to bet on ETH's potential price action leading up to the ETF's launch.
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