K33 Research, a prominent cryptocurrency analysis firm, has recently hinted that investors might want to pivot their attention from Ether (ETH) to Bitcoin (BTC), especially after the introduction of Ether futures-based exchange-traded funds (ETFs) in the US this Monday.
The inauguration of these ETFs, with versions provided by notable firms such as VanEck, ProShares, and Bitwise, didn’t capture the same enthusiasm or trading vigor as the Bitcoin futures ETFs’ introduction back in 2021.
A Tuesday market recap, initially covered by The Block, relayed insights from K33 Research analysts Vetle Lunde and Anders Helseth. They pointed out the relatively lukewarm reception of the Ether ETFs, which garnered a mere $8.5 million in assets under management (AUM) on their inaugural day. This pales in comparison to Bitcoin ETFs, which, during their launch, impressively accrued $576.5 million in AUM.
Ether optimism has faded
In the study conducted by Lunde and Helseth, they highlighted an initial surge of optimism due to the impending launch of Ether ETFs, reflected in an uptick in Ether futures premiums. However, this buoyancy was short-lived as the anticipated results turned out to be lackluster.
More than just the tepid reception, the Ether ETFs did not manage to arrest the trend of Ether’s dwindling value when juxtaposed with Bitcoin. This trend has been evident for over twelve months.
Drawing parallels to the 2017 introduction of regulated Bitcoin futures contracts on the CME exchange in the US, the duo underlined that institutional investors didn’t instantly flock to the Bitcoin futures market. Instead, it was a gradual acceptance, spanning several years.
The swift acceptance of Bitcoin futures ETFs in 2021 starkly contrasts the gradual institutional embrace of Bitcoin futures after their 2017 launch.
Drawing on this contrast, Lunde and Helseth postulate that now might be an opportune moment for investors to reconsider their allocations, pivoting from Ether to Bitcoin.
Their stance on the short-term prognosis for the ETH/BTC pairing is evident, as they noted, “In the imminent future, we don’t discern a compelling bullish narrative for ETH/BTC.”
The report further encapsulates the current ambiguity in trader sentiment. While futures market indicators suggest a bearish tilt, data from the options market conversely indicates a penchant for bullish call options, highlighting the market’s divided sentiment.