The upcoming launch of Ether exchange-traded funds (ETFs) around July 8 is expected to help Ethereum (ETH) perform better than Bitcoin (BTC) in the weeks after they start trading in the United States.
According to K33 analysts Vetle Lunde and David Zimmerman, Bitcoin may face selling pressure as $8.5 billion worth of BTC is returned to creditors of the collapsed exchange Mt. Gox starting this week.
In contrast, ETH has been underperforming against Bitcoin for over a year, despite Bitcoin’s market-leading gains driven by over $14 billion in flows to Bitcoin exchange-traded products this year.
Lunde and Zimmerman expect ETH to experience some initial turbulence following the ETF launch. However, they believe that inflows into the funds will likely boost ETH’s price over time.
Lunde said, “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 for ETH, anticipating net inflows of 0.75-1% of its circulating supply post-ETF launch, despite the market’s stubborn disagreement, as evidenced by Ether futures trading at a discount to Bitcoin futures and an ETH/BTC rate of 1 ETH to 0.055 BTC.
After falling to a yearly low of 0.045 on May 24 due to a decline in value compared to Bitcoin over the past year, the price of ETH/BTC rebounded quickly to its current value of 0.055 following the SEC’s sudden approval of Ethereum ETFs, as per CoinMarketCap data.
Lunde and Zimmerman noted that Ether futures open interest remains high, indicating that many traders are leveraging heavily to bet on ETH’s potential price movement leading up to the ETF launch.
They believe the ETFs represent a golden opportunity for ETH to strengthen its position against Bitcoin in the market.
Also Read: Mt. Gox $9 Billion Repayment Triggers Bitcoin Sell-Off Fears
