Ethereum Futures ETFs Underperform: Analysts Advise Return to Bitcoin
1. Analysts advise: “Keer terug naar BTC”
Analysts from major crypto analysis firm K33, Anders Helseth and Vetle Lunde, were clear in a recent market report: it is time to set Ethereum aside and return to Bitcoin (BTC). The trading volumes of the new Ether futures ETFs have fallen significantly short of expectations. On their first trading day, they represented only 0.2% of what the very first Bitcoin futures ETF generated on its first trading day in October 2021.
1.1 Disappointing performance of Ethereum futures ETFs
The launch of nine Ethereum futures ETFs this week has left many speculators who have been eagerly anticipating them for over a year feeling extremely disappointed. These ETFs, launched by investment firms such as ProShares, VanEck, and Bitwise, attracted just under $2 million on their introduction on October 2, much less than anticipated, as reported by Bloomberg.
1.2 The withdrawal of advice on ETH allocation increase
Although not many analysts and investors expected the Ether futures ETFs to match the trading volume of Bitcoin futures ETFs, the actual performance came as a disappointment. It even caused Lunde to retract his previous advice to investors to increase their allocation in ETH.
2. Lack of significant institutional interest in ETH
Vetle Lunde emphasized that the launch of ether futures exchange-traded funds offers an important lesson. Namely, “Easier access to crypto investments for traditional investors will only create buying pressure if there is significant, yet unmet demand.” According to him, this is not currently the case for Ethereum.
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2.1 Bitcoin’s potential with approved spot ETF and upcoming halving
Bitcoin, on the other hand, potentially has an approved spot ETF in the pipeline, as well as the long-awaited halving scheduled for mid-April 2024. From this, Lunde concluded, “The gravity in crypto lies with BTC for now, with a promising horizon ahead, which still argues for aggressive accumulation.”
The underperformance of the Ethereum futures ETFs has raised doubts among crypto analysts. While the launch of these ETFs was highly anticipated, the disappointing trading volumes have led some to believe that the enthusiasm may have been misplaced. In contrast, Bitcoin continues to show promise and potential, attracting more institutional interest. As always, it is important for investors to stay informed and reassess their investment strategies based on the current market conditions.