The underwhelming performance of nine new Ether (ETH) futures exchange-traded funds (ETFs) has led analysts at K33 Research to recommend a shift back into Bitcoin (BTC). In a recent market report, analysts Anders Helseth and Vetle Lunde advised investors to “pull the brakes on ETH and rotate back into BTC,” citing the disappointing trading volume of the Ether futures ETFs compared to the ProShares Bitcoin Strategy ETF (BITO).
The initial trading volume of Ether futures ETFs only accounted for 0.2% of what the Bitcoin futures ETFs accumulated on their first day of trading in October 2021. Although it was not expected for the trading volume of Ether futures ETFs to reach the levels of Bitcoin futures ETFs, the first-day numbers fell significantly short of expectations.
Vetle Lunde, one of the analysts, had previously recommended increasing ETH allocation to take advantage of the ETF hype. However, the lack of institutional appetite for Ether ETFs has caused Lunde to reassess his advice. He stated that increased institutional access to crypto investments will only create buying pressure if there is significant unsatiated demand, which is currently lacking for ETH.
Looking ahead, Lunde predicts that the crypto market will likely continue on a sideways trajectory for the foreseeable future, as there are no meaningful short-term price catalysts. He believes that 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. Lunde suggests that the “gravitational pull” in the crypto market currently favors BTC and recommends aggressive accumulation.
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Ben Laidler, a global markets strategist at eToro, shares a similar perspective. He believes that current macro trends, such as the actions of the Federal Reserve and oil prices, could have a downward impact on the prices of mainstay crypto assets like Bitcoin. Laidler states that as the rate hike cycle reaches its late stages, the market is seeking positive news to continue pushing prices higher. However, rising oil prices could cool sentiment and potentially lead to a decline in crypto asset prices.
Overall, the disappointing performance of Ether ETFs has prompted analysts to advocate for a shift back into Bitcoin. They believe that Bitcoin offers more favorable prospects, including the potential for ETF approval and the upcoming halving event. However, they caution that macro trends and external factors such as oil prices could impact the crypto market as a whole. Investors will need to carefully evaluate market conditions and make informed decisions based on their individual investment goals and risk tolerance.
