TL;DR
- Ethereum (ETH) ETFs Launching Soon: Spot Ether (ETH) exchange-traded funds (ETFs) are set to launch in the United States, potentially as early as July 8. These ETFs could be a game-changer for ETH’s price.
- Bitcoin Faces Mt. Gox Distribution: Bitcoin is dealing with a long-awaited distribution of 141,686 BTC ($8.8 billion) from the now-defunct Mt. Gox exchange. This could create selling pressure for Bitcoin.
- Positive Outlook for ETH: Despite potential short-term volatility, K33 Research predicts that ETH ETFs will absorb 0.75% to 1% of all ETH in circulation within their first five months.
Ethereum (ETH) is gearing up for a comeback against Bitcoin after trailing its sibling cryptocurrency since the beginning of the year, according to K33 Research. The smart contract platform is set to receive its first US-listed spot ETF this month, potentially ushering in a wave of institutional demand for ETH.
Governments are selling into the summer, while open interest in ETH is surging towards record levels with the ETF launch drawing near.https://t.co/PdJIFeikbT
— K33 Research (@K33Research) July 2, 2024
Meanwhile, Bitcoin faces the specter of a long-awaited 141,686 BTC ($8.8 billion) distribution from the now-defunct Mt. Gox exchange, a decade in the making. K33 Research anticipates that Ethereum ETFs will take in anywhere from 0.75% to 1% of all ETH in circulation during their initial five months on the market.
While the ETF launch might trigger a short-term “sell the news” event (similar to Bitcoin ETFs in January), the firm emphasizes ETH’s “positive supply dynamics,” which should provide relative strength over the coming months.
Senior analyst Vetle Lunde highlights the summer as a crucial period for ETH. As flows accumulate, ETFs are expected to bolster Ethereum’s position. Lunde views current ETH/BTC prices as an attractive opportunity for patient traders.
Ethereum (ETH)/ Bitcoin (BTC) Ratio Rebounds
The ETH/BTC ratio declined from 0.056 after the Bitcoin ETFs launched to 0.046 by May 24. However, news of the SEC’s impending approval of Ethereum ETFs pushed the ratio back up to 0.055. A sense of positivism continues to grow for ETH and BTC, especially in the futures market.
Bitcoin Futures Premiums and CME Interest
Bitcoin futures premiums on the Chicago Mercantile Exchange (CME) have rebounded to double digits (10.9%), signaling renewed interest. At the same time, the newly introduced VolatilityShares 2x leveraged ETH ETF has already amassed exposure equivalent to 33,700 ETH ($114 million) in just 15 trading days.
CME traders are actively seeking long-leveraged exposure to ETH. CME ETH open interest has surged to all-time highs, currently at 372,000 ETH ($1.26 billion). This heightened interest indicates traders positioning themselves ahead of the ETF launch, although the specific direction of these trades remains uncertain.
With the launch of ETH ETFs on the horizon, the market’s future is up in the air. Soft funding rates suggest a balanced expectation, with neither bullish nor bearish positioning dominating. Ethereum’s relative strength and positive supply dynamics position it well for the months ahead, potentially outperforming Bitcoin.
