The imminent launch of exchange-traded funds (ETFs) on July 23 sparked great anticipation. At the same time, a large transfer of 12,000 Ethereums to the US-based Kraken platform by an anonymous entity raised questions about potential market movements. Amid these events, the cryptocurrency community remains focused on the potential impacts of these ETFs and the ongoing regulatory discussions surrounding the Ethereum rating..
New report suggests Ethereum (ETH) may soon outperform Bitcoin (BTC) after the launch of upcoming Ethereum exchange-traded funds (ETFs) in the US.
One of the key metrics highlighted is the Ether to Bitcoin price ratio, which measures the amount of BTC required to buy a single ETH. Currently, this ratio stands at 0.05, a significant increase from the 0.045 recorded before the SEC approval. on Ethereum spot ETFs. This rise indicates that the price of ETH is higher compared to BTC, indicating growing investor confidence in Ethereum.
The report also pointed to the depth of the Ethereum market by 1% as a potential catalyst for the upcoming rise of Ethereum. Market depth is a measure of liquidity in a market. Low liquidity often leads to higher volatility, while higher liquidity tends to stabilize market prices despite large orders. The low depth of the Ethereum market, coupled with growing demand, suggests that any large buy orders can lead to prices rising sharply..
This potential price rise is supported by the Ethereum Exchange Reserve, a metric that tracks the amount of Ethereum available for purchase on exchanges. Currently, this reserve is at multi-year lows, signaling the coming supply shock driven by institutional demand to fill Ethereum’s ETFs. This scarcity could push ETH prices up dramatically as investors scramble for the asset..
Expectations of lower ETFs streams of Ethereum compared to Bitcoin due to various investment factors
Ethereum ETFs (ETFs) in the US are expected to see a significant decrease in net inflows compared to their Bitcoin (BTC) counterparts. The bank estimates that net inflows to Ethereum ETFs will be only 30% – 35% of those of Bitcoin, with inflows ranging from $4.7 billion to $5.4 billion within the time. Six months. These expectations are primarily due to various factors that may limit investors’ interest in Ethereum ETFs..
Possible reasons limiting investor interest
Citi has identified the lack of ownership opportunities in Ethereum ETFs as one of the main reasons for the expected low cash flows. Unlike Bitcoin, which has benefited from large flows and superior performance since the approval of spot ETFs, Ethereum does not offer Features of cadastral signature within these financial products. This may deter investors looking to earn additional returns through the scanning signature. ACCESS NEWSLINKER FOR THE LATEST TECHNOLOGY NEWS.
Moreover, Bitcoin’s first-mover feature also plays an important role. Spot Bitcoin ETFs were approved earlier and have already started trading, attracting a large part of the interest of investors and capital. This early approval has allowed Bitcoin to establish a dominant position in the market that Ethereum ETFs cannot easily replicate.
Citi also noted the remarkable similarity between Bitcoin and Ethereum among potential investors to buy spot ETFs. The bank believes that these investors may split their provisions between the two cryptocurrencies rather than treating them as separate assets. This approach could lead to ETH taking over some money that could have been allocated to Bitcoin, rather than attracting entirely new capital.
ETFs will launch on July 23 amid market speculation
The cryptocurrency community is eagerly awaiting the launch of spot ETFs, and it is expected that sooner rather than later. Eric Balchonas, senior ETF analyst at Bloomberg, announced that Ethereum ETFs are scheduled to launch on July 23. The highly anticipated event coincides with the Bitcoin 2024 conference, which increases the excitement and speculation surrounding the introduction of these financial products.
The SEC has asked potential issuers to resubmit the final S-1 forms by Wednesday. This step is crucial in the regulatory process, ensuring that all documents are up-to-date and compliant with SEC requirements. SEC approval of 19B-4 applications The various Ethereum ETFs in May marked a noticeable shift in their position, signaling their willingness to embrace these new financial instruments.
However, there is still a possibility of last-minute delays, as the SEC continues to examine final applications. Historically, the ETF approval process has been fraught with uncertainty, and Ethereum ETFs are no exception. However, the current trajectory suggests that the launch scheduled for July 23, July is on track.
The imminent launch of Ethereum’s ETFs has generated a mixture of excitement and caution among market participants. There is considerable controversy over the demand these products will attract and their overall performance in the market.
Banking giant JPMorgan expressed doubts about the performance of Ethereum ETFs, predicting that they will underperform Bitcoin ETFs. This cautious view is based on Bitcoin’s historical dominance in the cryptocurrency market and its well-established presence as a store of value.
On the contrary, local cryptocurrency companies like Gemini are more optimistic about the potential success of Ethereum’s ETFs. These companies argue that Ethereum’s blockchain technology is versatile and widely used in decentralized applications (dApps).) and smart contracts provide a strong foundation for continued investor interest.
