K33 Research analysts predict that the launch of spot Ether exchange-traded funds (ETFs) in the United States could lead to Ether outperforming Bitcoin once they go live. The ETFs are expected to be launched as soon as July 8, and analysts Vetle Lunde and David Zimmerman describe them as a “golden egg” for Ether’s price action. However, Bitcoin may face sell pressure as $8.5 billion worth is returned to creditors of collapsed exchange Mt. Gox starting this week, according to the analysts.
Ether has been underperforming relative to Bitcoin for over a year, while Bitcoin has been experiencing market-leading gains. Lunde and Zimmerman stated that it’s reasonable to expect the price of ETH to stumble immediately following the launch of the ETFs. However, they also noted that inflows to the spot funds would likely bolster ETH’s price in the long term.
The analysts believe that ETFs are a solid catalyst for relative ETH strength, and they view current ETH/BTC prices as a bargain for patient traders. Despite this, the market still disagrees with their position, as evidenced by Ether futures trading at a relative discount to Bitcoin futures and the price of ETH relative to the price of Bitcoin trading at a rate of 1 ETH to 0.055 BTC.
Over the past 12 months, the value of ETH has steadily declined compared to Bitcoin, hitting a yearly low of 0.045 on May 24. However, the price of Ether relative to Bitcoin reversed quickly following the SEC’s sudden decision to approve Ether ETFs, surprising analysts and seeing ETH/BTC tick up to its present value of 0.055, according to TradingView data.
Lunde and Zimmerman also noted that Ether futures open interest has spiked leading into the ETF launch, indicating that many traders are taking on high amounts of leverage to bet on ETH’s potential price action heading into the launch of the ETFs.