According to analysts at K33 Research, the lackluster performance of nine new Ethereum futures Exchange Traded Funds (ETFs) has prompted a recommendation to “rotate back” into Bitcoin. In a market report released on October 3, analysts Anders Helseth and Vetle Lunde suggested that it is time to pull back on Ether (ETH) and shift focus back to Bitcoin (BTC). The initial trading volume of Ether futures ETFs accounted for only 0.2% of the ProShares Bitcoin Strategy ETF’s (BITO) trading volume on its first day of trading in October 2021.
Although the analysts acknowledged that no one expected the initial trading volume of Ether futures ETFs to come close to the Bitcoin futures ETFs’ trading volume, the underwhelming numbers on the first day were far below expectations. This lack of institutional appetite for Ether ETFs caused Vetle Lunde to retract his previous advice of increasing ETH allocation to capitalize on the ETF hype, stating that “this is not the case for ETH at the moment.”
Lunde further explained in the report that the majority of the crypto market lacks any significant short-term price catalysts and is likely to continue on a sideways trajectory in the foreseeable future. In his view, this landscape is more favorable for Bitcoin, which has the potential for ETF approval early next year and the upcoming halving event in mid-April.
Global markets strategist at eToro, Ben Laidler, shares a similar sentiment, albeit with a slightly more bearish outlook. Laidler points to current macro trends as a potential downward trigger for prices of mainstay crypto assets like Bitcoin. He highlights the influence of the Federal Reserve and oil prices on the crypto market in recent years, suggesting that with rising oil prices, there could be a cooling effect on sentiment.
Overall, the K33 Research report emphasizes the underwhelming performance of Ethereum futures ETFs and recommends shifting focus back to Bitcoin. It suggests that the current crypto market landscape favors Bitcoin due to its upcoming potential events and stronger institutional demand compared to Ether. However, Laidler cautions that macro trends, such as oil prices, could impact the sentiment and prices of major cryptocurrencies.
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