It’s Time to ‘Pull the Brakes’ on Ethereum and Return to Bitcoin: K33 Report
The relative lack of interest in nine new Ethereum futures exchange-traded funds (ETFs) has prompted analysts at K33 Research to encourage a “return” to Bitcoin (BTC).
In an Oct. 3 market report, analysts Anders Hales and Vettel Lunde said, “It's time to pull the brakes on ETH and roll over to BTC.” Ether Futures ETF's initial trading volume is just 0.2% of ProShares. On the first day of trading in October 2021, the Bitcoin Strategy ETF (BITO) accumulated.
The analysts said that no one expected to see initial trading volume on Ether Futures ETFs, and that with Bitcoin futures ETFs to “come anywhere” – launched amid a tumultuous bull market – first-day numbers “strongly” missed expectations.
This lack of institutional appetite for Ether ETFs has led Lunde to back off on his advice to increase ETH allocations to better take advantage of ETF incentives.
“The ETH futures ETF launch provides an important lesson for traditional investors in assessing the impact of ease of access to crypto investments: increased institutional access creates buying pressure if there is significant unmet demand,” Lunde wrote.
“This is not an ETH issue at the moment.”
Lunde explained in a section of the report titled “Too Much Up Front” that most of the crypto market has no meaningful short-term price incentives and will likely continue to be on the sidelines for the foreseeable future.
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In Lunde's view, this landscape is only suitable for Bitcoin, which has an ETF approval spot to look forward to early next year, as well as a halving event in mid-April.
“Gravity in crypto remains in BTC for the time being, with a promising event down the line still supporting bullish stocks.”
Ben Laidler, global market strategist at eToro, predicts a similar path forward for crypto assets, albeit with a bit more bullishness.
In comments emailed to Cointelegraph, Laidler pointed to current macro trends that could lead to lower prices for major crypto assets such as Bitcoin.
“The Fed and oil prices have been consistently strong influencers on the crypto market over the past two years,” Laidler wrote. “At the end of the bullish cycle we're in, the market is looking for more good news to push on, but this will have a chilling effect on sentiment as oil prices rise again.”
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