Ethereum poised to outperform Bitcoin with the launch of spot ETFs, while Mt. Gox repayments pose challenges for BTC


3rd July 2024 – (New York) Ethereum (ETH) is expected to outshine Bitcoin (BTC) in the coming weeks, driven by the launch of spot exchange-traded funds (ETFs) in the United States, according to analysts at K33 Research.

The ETFs, scheduled to debut on July 8, are anticipated to be a game-changer for ETH’s price, while BTC faces selling pressure as creditors of the now-defunct Mt. Gox exchange start receiving $8.5 billion in repayments this week, as stated in a 2nd July report by K33 analysts Vetle Lunde and David Zimmerman.

ETH has lagged behind BTC for over a year, with Bitcoin enjoying significant gains supported by more than $14 billion flowing into BTC-based exchange-traded products this year.

Lunde and Zimmerman predict that ETH may stumble initially after the ETF launch but expect the inflows into these funds to bolster ETH’s price, similar to the effect seen on Bitcoin. Lunde stated, “ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate, and I firmly view current ETH/BTC prices as a bargain for the patient trader.”

The analysts maintain a bullish outlook on ETH, anticipating net inflows equivalent to 0.75-1% of ETH’s circulating supply in the five months following the ETF launch. However, they note that the market still disagrees with their stance, pointing to Ether futures trading at a relative discount to Bitcoin futures and the ETH/BTC price ratio currently at 1 ETH to 0.055 BTC.

Over the past 12 months, the value of ETH compared to BTC has steadily declined, hitting a yearly low of 0.045 on May 24. However, the approval of Ether ETFs by the SEC surprised analysts and quickly reversed the trend, with ETH/BTC ticking up to its present value of 0.055, according to TradingView data.

Lunde and Zimmerman highlight the relentless open interest in Ether futures, indicating that many traders are leveraging significant positions to bet on ETH’s potential price action leading up to the ETF launch.