- Ether ETFs will help the crypto outperform bitcoin, Kaiko said.
- Once these funds launch this month, the trend should keep deepening, it estimated.
- Wall Street has been bullish on ether, with analysts focus on demand and supply tailwinds.
The anticipated debut of spot ether exchange traded funds should bolster the token’s performance versus bitcoin, according to research from analytics firm Kaiko.
It noted that the ether-to-bitcoin ratio, a measure that compares the two leading cryptocoins, has risen significantly since regulators approved the ETFs in May: the ratio has risen from 0.045 to 0.05, and has remained elevated, Kaiko said.
Put another way, it takes more bitcoin to purchase one ether token, and the trend should only deepen when the ETFs come online, which is expected to happen as soon as next week, the firm said. Even though ether’s price has swung both ways since May, the ratio indicates that the token is primed for upside.
Kaiko
CME Group added that interest in ether has driven crypto trading in the second quarter.
“Traders began utilizing Ether/Bitcoin Ratio futures more than ever in Q2 as ether’s performance improved relative to bitcoin’s performance. Over $260M in notional value was traded,” the firm wrote on Tuesday. “Ether futures achieved record open interest of 7.6K contracts ($1.3B notional) on June 24 and a record $2.85B traded on May 21.”
The upcoming launch of ether ETFs has been celebrated by Wall Street, in part on the success notched by this year’s spot bitcoin funds.
Yet, some have noted that ether comes with hard-to-pass features that should boost demand for it, such as an annual yield and more functionality — offers not seen in bitcoin.
Aside from demand factors, SynFutures CEO Rachel Lin pointed out that upside would come from a supply shift that would cause the bitcoin-ether price ratio to tighten, she said in May.
“Overall, I know the market is bullish on Ethereum right now, but it’s not bullish enough. Now the spot ETH ETF is approved, all indicators indicate a massive ETH bull run in the coming months,” Lin said after the funds’ approval.
By her estimate, ether could reach as high as $22,500 this cycle, a 550% increase from current levels.
Also, these new ETFs should be less exposed to the headwinds faced by spot bitcoin ETFs. For instance, Standard Chartered pointed out that big outflows are less likely, given smaller reasons for forced selling.
Ether was down 1.02% at $3,450.22 as of 1p.m. ET on Tuesday. It is up over 51.79% for the year.