CoinDesk Reports:
Author: Tom Mitchelhill, CoinTelegraph; Translation: Wuzhu
According to K33 Research, the launch of a spot Ethereum exchange-traded fund (ETF) could lead to the cryptocurrency outperforming Bitcoin in the United States in the weeks following its debut.
K33 analysts Vetle Lunde and David Zimmerman stated in a report on July 2 that the ETF, expected to launch as early as July 8, could be a “game changer” for ETH prices, while Bitcoin might face selling pressure due to the $8.5 billion reimbursement to creditors of the Mt. Gox exchange starting this week.
Over the past year, ETH has consistently underperformed Bitcoin, with over $14 billion flowing into Bitcoin exchange-traded products this year, propelling Bitcoin’s market-leading rise.
Lunde and Zimmerman anticipate ETH to “initially drop” post-ETF launch, but they noted that, similar to Bitcoin’s history, funds flowing into the ETF could bolster ETH prices.
Lunde wrote, “With summer upon us and funds accumulating, the ETF serves as a solid catalyst for relative strength in ETH, and I believe the current ETH/BTC price is attractively low for patient traders.”
“We maintain a bullish outlook on ETH, expecting net inflows equivalent to 0.75-1% of ETH’s circulating supply within 5 months post-launch.”
The analyst noted that the market remains “stubbornly” opposed to their stance, pointing out a relative discount in Ethereum futures prices compared to Bitcoin futures, with the ETH/BTC price ratio at 1 ETH to 0.055 BTC.
Over the past 12 months, ETH has steadily declined relative to Bitcoin, hitting an annual low of 0.045 on May 24.
Since last year, ETH/BTC had been on a downward trend until a surprise approval of the ETH ETF led to a reversal. Source: TradingView
According to TradingView data, Ethereum’s price relative to Bitcoin swiftly reversed after the SEC’s sudden approval of the ETH ETF, surprising analysts and pushing the ETH/BTC ratio to 0.055.
Nevertheless, Lunde and Zimmerman noted that the current open interest in Ethereum futures is harsh, indicating many traders are leveraging heavily to bet on potential price movements before the ETF launch.
Significant increase in open interest in ETH futures occurred prior to the ETF launch. Source: K33 Research