Ethereum ETF Launch Could Lead to Ether Outperforming Bitcoin, According to Kaiko Study

Kaiko’s latest study suggests that the introduction of spot Ethereum ETFs in the United States could result in Ether surpassing Bitcoin in terms of performance. This conclusion is based on market depth and the growing institutional demand for Ethereum.

The focus of the research was on the Ether to Bitcoin Price Ratio, which indicates the number of Bitcoins needed to purchase one Ether. As this ratio increases, the price of Ether relative to Bitcoin also rises.

Before the approval of spot Ether ETFs by the Securities and Exchange Commission (SEC), the ratio stood at 0.045, but it has now climbed to 0.05.

The analysis highlights that Ether’s 1% market depth could potentially trigger a bullish trend in the near future. Market depth determines the liquidity of an asset. Higher liquidity results in price stability even when large orders are placed, while lower liquidity leads to increased price volatility.

The Ethereum Exchange Reserve, which tracks the amount of Ether available for purchase on exchanges, is currently at multi-year lows. This could indicate a surge in supply due to institutional demand for Ethereum ETFs, potentially driving prices up.

Industry analysts are anticipating the imminent launch of spot Ethereum ETFs. Senior Bloomberg ETF analyst Eric Balchunas suggests a launch window in July.

Institutional investor Tom Dunleavy predicts that Ethereum ETFs could attract $10 billion in funding, translating to around $1 billion monthly.

There is ongoing debate within the regulatory community regarding whether Ether should be classified as a commodity or a security. Laura Brookover, an attorney for Conensys, mentions that the SEC halted its investigation into the smart contract protocol in June to avoid any potential embarrassment.

CFTC chairman Rostin Behnam recently stated that Ethereum (ETH) is considered a commodity under the jurisdiction of his organization.

In conclusion, the potential introduction of spot Ethereum ETFs in the US has sparked significant interest and speculation within the cryptocurrency market, with many eyes on the anticipated launch and its potential impact on Ether’s performance relative to Bitcoin.