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The relatively subdued performance of nine newly launched Ethereum futures exchange-traded funds (ETFs) has led analysts at K33 Research to recommend a “rotate back” into Bitcoin (BTC).
In a market report dated Oct. 3, analysts Anders Helseth and Vetle Lunde stated that it is “time to pull the brakes on ETH and rotate back into BTC,” noting that the initial trading volume of Ether futures ETFs represented only 0.2% of the total that the ProShares Bitcoin Strategy ETF (BITO) achieved on its first trading day in Oct. 2021.
While the analysts acknowledged that no one anticipated the initial trading volume of the Ether futures ETFs to “come anywhere close” to that of the Bitcoin futures ETFs — which were launched during a strong bull market — the disappointing first-day figures “strongly” fell short of expectations.
Day one trading of ETH futures ETFs accounted for just 0.2% of what BTC futures ETFs amassed in 2021. Source: K33 Research
This lack of institutional interest in Ether ETFs led Lunde to retract his earlier suggestion of increasing ETH allocation to best leverage the ETF excitement.
“The ETH futures ETF launch offers a crucial lesson for assessing the effects of improved access to crypto investments for traditional investors: enhanced institutional access will only generate buying pressure if there is significant unmet demand,” Lunde wrote.
“This is not the case for ETH at the moment.”
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In the report section titled “more chop ahead,” Lunde elaborated that the majority of the crypto market currently lacks any substantial short-term price catalysts and is likely to continue on its sideways path for the foreseeable future.
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According to Lunde, this environment is primarily advantageous for Bitcoin, which has a potential spot for ETF approval anticipated early next year, along with the halving event projected for mid-April.
“The gravitational pull in crypto for the time being stays in BTC, with a promising event horizon down the line, still favoring aggressive accumulation.”
Ben Laidler, global markets strategist at eToro, outlined a similar trajectory for crypto assets, though with a somewhat more bearish outlook.
In comments sent via email to Cointelegraph, Laidler highlighted current macro trends as a possible downward influence on the prices of major crypto assets like Bitcoin.
“The Fed and oil prices have been consistently strong macro influencers on the crypto market in the past couple of years,” Laidler wrote. “At this late stage of the rate hike cycle we’re in, the market is seeking further positive news to drive momentum, but with oil prices rising again, this could dampen sentiment.”
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