Crypto analysis firm K33 Research has recently suggested that investors consider shifting their focus from Ethereum (ETH) to Bitcoin (BTC) in light of the debut of Ether futures-based exchange-traded funds (ETFs) in the US.
The Performance of Ether ETFs
The launch of Ether ETFs, including offerings from VanEck, ProShares, and Bitwise, did not generate the same level of attention and trading activity as the introduction of Bitcoin futures ETFs in 2021. On their launch day, the Ether ETFs only managed to accumulate $8.5 million in assets under management, while Bitcoin ETFs amassed a substantial $576.5 million. This unexpected weak performance highlights the initial struggle of Ether ETFs to gain traction.
Ether’s Declining Value Relative to Bitcoin
In their report, analysts Vetle Lunde and Anders Helseth noted that the Ether ETFs failed to reverse the ongoing trend of Ether’s declining value relative to Bitcoin. This decline has persisted for over a year, and the lackluster results of the ETFs have not helped to change this situation. Lunde and Helseth compared this scenario to the launch of regulated Bitcoin futures contracts on the CME exchange in the US in 2017. They pointed out that it took years for institutional investors to embrace the Bitcoin futures market, while Bitcoin futures ETFs in 2021 were quickly adopted.
“We no longer see a strong bull case for ETH/BTC in the short term.”
This statement from Lunde and Helseth suggests that it may be time to reallocate from Ether to Bitcoin. The underwhelming performance of Ether ETFs, coupled with the ongoing decline in Ether’s value relative to Bitcoin, contributes to their argument for shifting focus to Bitcoin.
Overall, there is a division among traders in their outlook for the crypto market. Futures market data reveals bearish sentiment, while options data indicates a preference for bullish call options. The contrast in market data further adds to the uncertainty surrounding the future of cryptocurrencies, making it crucial for investors to carefully consider their investment strategies.
