ETFs
BloFin Believes Ethereum Spot ETFs Will Drive Short-Term ETH Price Upside
Crypto exchange BloFin believes in imminent launch of spot Ethereum Exchange-traded funds (ETFs) in the United States will drive a near-term rise in ETH prices as investors shift their focus from Bitcoin to the second-largest crypto asset by market capitalization, according to a research note from 26 June shared with CryptoSlate.
The exchange, citing various data points such as options asymmetry, portfolio adjustments and whale holdings, noted that the launch of the ETFs would likely increase Ethereum’s near-term price.
BloFin analysts said:
“BTC’s relative strength has been going on for several months, but investors are changing their minds: they seem to believe that ETH’s performance will strengthen for a while with the listing of spot ETH ETFs. »
Last month, the U.S. Securities and Exchange Commission (SEC) approved key deposits for spot ETH ETFs, surprising many market participants. Since then, ETH ETF applicants have been engage with regulator staffand there are rumors that these financial instruments could start trading as soon as first week of July.
ETH Bullish Expectations
BloFin observed that Bitcoin’s skewness data has been more bullish than Ethereum’s for most of this year. However, the trend has reversed in recent weeks as investors’ short-term expectations regarding Bitcoin now “neutral” and “slightly bearish” while expectations for Ethereum is more optimistic.
Although investors remain optimistic about Bitcoin’s mid-to-long term performance, their optimism for Ethereum has surpassed that of the leading cryptocurrency in the shortest time frame.
Analysts explained that one of the reasons for this change is the potential for higher returns. According to the note:
“Assets with relatively low market capitalization and relatively high volatility have greater return potential during the declining interest rate cycle.”
BloFin also predicts that the “asset allocation period” following the approval of Ethereum spot ETFs will have a positive impact on the price of ETH, similar to The Bitcoin Experience in February and March.
Furthermore, the latest forward exchange rate structure of ETH/BTC suggests that investors believe ETH will outperform BTC in the coming months, pushing the exchange rate higher in the short term.
According to analysts:
“The risk premium difference between ETH and BTC has also converged towards 25[basis points]and investors are looking forward to the new potential wealth effect brought by ETH after the listing of spot ETH ETFs.
BloFin highlighted that on-chain data further supports its bullish outlook. According to the company, ETH whales have stopped selling their holdings, while BTC whales continue to reduce theirs.
The company noted that this could be due to minors regularly sell BTC for cashbut it could also indicate that investors are readjusting their portfolios.