The ETH to BTC ratio remains high, suggesting Ethereum’s potential to surpass Bitcoin.

The ETH ETF is set to launch on July 23rd, and experts predict significant price increases.

According to the analytics firm Kaiko, Ethereum (ETH) is anticipated to outperform Bitcoin (BTC) following the launch of spot Ethereum exchange-traded funds (ETFs). This is considered a major change in the crypto market landscape, which may be a turning point for Ethereum.

In the latest report by Kaiko, there has been a marked shift in market sentiment since the U.S. SEC allowed ETH to spot ETFs in May of this year. Despite ETH’s 20% decline since the approval, underlying indicators suggest a readiness for the ETF launches. 

 The ratio of ETH to BTC, which is a comparison of the two assets’ performance, is still high at 0. 05, from the pre-approval values of about 0. 045. This higher ratio shows that Ethereum has the ability to perform better than Bitcoin after the ETFs are launched. 

Ether’s shallow market depth, which stands at 1%, might also exacerbate this phenomenon. This metric, which indicates the amount of liquidity in the market, shows that an increase in demand could greatly affect prices. Clara Medalie, an analyst at Kaiko, stated, “The reduced liquidity of ETH makes it more sensitive to price movements. The influx of capital via spot ETFs could thus provoke a rapid and pronounced rise.”

This analysis is supported by the fact that Ether reserves on exchanges have hit their historical lows. This supply deficit may lead to higher prices if there is increased demand from institutions. 

Bloomberg Expert Announces Upcoming ETH ETF Launch Date

Bloomberg ETF expert Eric Balchunas revealed that the ETH ETF will hit the market on July 23rd. This launch is expected to propel Ethereum to the most active crypto market, hence improving its performance against Bitcoin. However, not all analysts agree with this positive view. 

Benjamin Cowen, a popular crypto analyst, has a different take. In a recent video update, Cowen stated that the Federal Reserve’s monetary policy has a larger impact on ETH prices than the ETF. He also pointed out that previous narratives of Ether being in a bull run have not always led to long-term price improvements. 

According to Cowen’s analysis, the centerpiece of which is the fundamental macroeconomic environment, is a key determinant of the price of Ethereum. He noted that in 2022, even with bullish sentiment around Ethereum’s shift from proof-of-work to proof-of-stake, ETH’s price versus BTC went down. 

Bitwise Project Significant Inflows for Ethereum ETFs

According to Matt Hougan from Bitwise, new inflows from Ethereum ETFs may significantly drive up the price of ETH, possibly even above $5,000. In a memo to investors, Hougan expressed confidence that new highs could be reached by year-end, with the possibility of even higher prices if ETF flows exceed expectations.

According to Hougan, Ethereum ETFs could have a greater impact on ETH’s price than Bitcoin ETFs have on BTC. He linked this to the fact that ETFs offer a market for commodities yet do not change the basic parameters of the commodities.

At the time of writing, ETH is trading at $3,490, with a 2.7% increase in the past 24 hours. The cryptocurrency briefly touched an intraday high of $3,517 earlier today, with a market cap of $419 billion. Ethereum’s daily trading volume surged by 3%, reaching $18.9 billion. 

---

Filed under: Bitcoin - @ July 17, 2024 12:06 pm