Spot ETH ETF Launch Positions Ethereum to Surpass Bitcoin: Kaiko Analytics
Ethereum is poised to potentially outpace Bitcoin following the introduction of spot Ethereum exchange-traded funds (ETFs), as per insights from analytics company Kaiko. In a recent analysis, Kaiko highlights a notable shift in the sentiment within crypto markets since the approval of spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) back in May.
Despite the delay in the trading commencement of the new ETF products and Ethereum experiencing a nearly 20% decline in the interim, Kaiko suggests that the underlying conditions indicate readiness for spot ETF launches. The ETH to BTC ratio, a gauge of the two assets’ performance relative to each other, remains elevated at around 0.05, significantly higher than the pre-approval levels of approximately 0.045. This heightened ratio implies that Ethereum could potentially continue to outperform Bitcoin post ETF launches.
According to ETF expert Eric Balchunas from Bloomberg, the ETH ETF is scheduled for launch on July 23rd. While Kaiko raises the prospect of Ethereum continuing its upward trajectory against Bitcoin, renowned crypto analyst Benjamin Cowen offers a diverging viewpoint, indicating that the ETF rollout may not provide Ethereum with the anticipated boost.
Cowen emphasized in a recent video update that Federal Reserve monetary policy plays a more substantial role in influencing ETH’s price compared to the ETF and previous optimistic narratives surrounding Ethereum in recent years. He expressed skepticism about the ETF’s impact on the ETH/Bitcoin valuation, citing past unmet expectations and the evolving dynamics of the cryptocurrency landscape.
The narratives surrounding the transition from proof-of-work to proof-of-stake and the deflationary mechanism were initially expected to support the Ethereum/Bitcoin valuation, but the reality has not aligned with these projections. Cowen’s analysis suggests that monetary policy considerations may hold more significance in determining the valuation dynamics between Ethereum and Bitcoin than other perceived factors.
In conclusion, the evolving landscape of crypto markets, particularly with the advent of spot Ethereum ETFs, has sparked varied perspectives on the potential impact on Ethereum’s performance relative to Bitcoin. While some anticipate Ethereum’s continued outperformance, others like Cowen underscore the nuanced interplay of factors such as monetary policy in shaping the valuation dynamics between these two prominent cryptocurrencies.
