Ether Could surpass Bitcoin After Spot ETF Launch

The imminent approval of spot Ethereum ETFs could catalyze Ether’s performance relative to bitcoin. This is the conclusion of a recent analysis by Kaiko, as the crypto sector eagerly awaits the SEC’s green light for these new investment vehicles.

A favorable momentum for Ether

The ETH/BTC price ratio, a key indicator of Ether’s relative strength against bitcoin, shows encouraging signs. This ratio, currently at 0.05, has already increased since the SEC‘s announcement regarding spot Ethereum ETFs. An increase in this indicator would signal better performance of ETH relative to BTC.

The shallow market depth of Ether, measured at 1%, could amplify this dynamic. This metric, reflecting the available liquidity, suggests that an increase in demand could have a significant impact on prices. 

Clara Medalie, an analyst at Kaiko, explains: “The reduced liquidity of ETH makes it more sensitive to price movements. The influx of capital via spot ETFs could thus provoke a rapid and pronounced rise.”

This analysis is corroborated by the historically low levels of Ether reserves on exchanges. This phenomenon, synonymous with supply scarcity, could accentuate upward pressure on prices in the event of increased institutional interest.

The countdown to Ethereum ETFs

The industry expects a quick launch of the spot Ethereum ETFs. Eric Balchunas, senior analyst at Bloomberg, mentions a probable window around July 23. He specifies:

“The SEC has asked issuers to submit their revised S-1 forms by July 16. This suggests a potential launch as early as the following week.”

Predictions are optimistic regarding the adoption of these new products. Tom Dunleavy, an institutional investor, anticipates massive capital inflows:

“We anticipate about $10 billion in inflows into Ethereum ETFs over the first year, which equates to nearly a billion per month.”

This positive momentum for ETH fits within a broader context of crypto sector growth. Recently, Ethereum dominated the blockchain revenue landscape, generating $2.728 billion compared to $1.302 billion for Bitcoin.