Crypto broker recommends switching from Ethereum to Bitcoin

• Ethereum futures ETFs fall far short of expectations
• Institutional demand low
• Analysts recommend reducing Ethereum exposure in favor of Bitcoin

The long-awaited debut of Ethereum futures ETFs on October 2nd of this year appears to have been marked by disappointments so far. According to a report from K33 Research, not only was the first day of trading disappointing, but analysts Vetle Lunde and Andres Helseth are currently not seeing any buying pressure on Ethereum.

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Slow start for Ethereum future ETFs: expert advises withdrawal

The six Ethereum funds from investment companies ProShares, VanEck, Bitwise, Valkyrie, Kelly and Volshares only attracted $1.92 million on their first day of trading – much less than the experts had expected. According to the K33 report, the trading volume of the new Ethereum ETFs remained significantly behind the launch of the Bitcoin future ETFs in 2021; they recorded only 0.2 percent of the trading volume at the time. Even though it was already clear in advance that the new Ethereum products could not keep up with the impressive trading volumes of Bitcoin products, Bloomberg ETF analyst Eric Balchunas described the volume as “pretty modest”.

The lack of buying pressure is now causing experts to doubt further involvement in Ethereum. “Increased institutional access will only create buying pressure if there is significant unsaturated demand. This is not the case with ETH at the moment,” write K33 analysts. They currently prefer exposure to the Cyberurdevise Bitcoin. “We believe it is time to pull the brakes on ETH and invest in BTC again,” said Lunde and Helseth.

The top performer from the group was the ProShares Ether Strategy ETF, which recorded a trading volume of $878,560, which, although representing a market share of over 45 percent, remained in comparison to the ProShares Bitcoin Strategy ETF (BITO), which fell within the first two trading days In 2021, a trading volume of around one billion US dollars was reached, also far behind.

What does the Ethereum price do?

Compared to 2021, the situation on the crypto market is of course completely different at the moment. After the scandals in 2022 – from the Terra/LUNA crash to the FTX bankruptcy – the entire crypto market crashed. Although most coins were able to clearly move away from their lows in 2023, they are still a long way from their highs. Ethereum has performed below average. Although Ethereum has increased significantly since the beginning of the year, the price increases remain far behind those of Bitcoin. In addition, the second-largest cryptocurrency by market capitalization has recently fallen below the psychologically important mark of $1,600, which is leading experts to bleak scenarios for the altcoin – including a crash to $1,000. Ethereum is currently trading at just under $1,800.

Additionally, “every crypto-related launch tends to buy the rumor and sell the news,” writes Bloomberg Intelligence’s Eric Balchunas. After the launch of the Bitcoin future ETFs in 2021, the original cryptocurrency also fell significantly. “I wouldn’t be surprised if this happens with futures ETFs as well,” Balchunas said.

Ethereum spot ETFs: SEC decision still pending

Important decisions regarding the approval of further Ethereum financial products are currently pending. The approval processes for Ethereum spot ETFs are being pushed back. As the SEC announced, the decision on the ARK 21 Shares Ethereum ETF and the VanEck Ethereum ETF will be postponed. Most recently (on October 2nd), asset manager Grayscale filed with the SEC to convert its Grayscale Ethereum Trust (ETHE).

Editorial team finanzen.net

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