NAIROBI (CoinChapter.com)— According to a new report by Kaiko, Ethereum could outperform Bitcoin following the launch of Ethereum exchange-traded funds (ETFs) in the United States. Bloomberg analyst Eric Balchunas anticipates the ETFs’ debut by July 23 and predicts a significant impact on Ether’s market performance.
Ethereum ETFs Could Transform Market Dynamics
Kaiko’s report emphasizes the Ether to Bitcoin Price Ratio, currently at 0.05, up from 0.045 before the US Securities and Exchange Commission (SEC) approved the spot Ether ETFs. The ratio indicates the amount of Bitcoin required to purchase one Ether, with a higher ratio signifying stronger Ether relative to Bitcoin.
Kaiko also notes that Ether’s 1% market depth could drive an ETH bull run. Market depth, which measures liquidity, is crucial for stabilizing prices against large orders. The Ethereum Exchange Reserve, indicating the amount of Ether available on exchanges, is at multi-year lows.
This suggests a potential supply shock as institutional demand for Ethereum ETFs increases, possibly driving prices higher.
Spot Ethereum ETFs Expected to Launch Soon
The anticipated launch of spot Ethereum ETFs has captured the market’s attention. Senior Bloomberg ETF analyst Eric Balchunas forecasts a July launch, with the SEC asking applicants to submit amended S-1 forms by July 16, ahead of a potential July 23 debut.
Moreover, Balchunas’s forecast reflects growing optimism about the regulatory approval and its potential impact on the market.
Institutional investor Tom Dunleavy predicts that Ethereum ETFs could attract $10 billion in inflows, averaging $1 billion per month. This influx could significantly bolster Ether’s market position, potentially outperforming Bitcoin.
Additionally, the expectation of substantial inflows underscores the perceived demand and interest from institutional investors.
Regulatory Debate Surrounds Ether’s Status
Ethereum’s regulatory status remains contentious. In June, the SEC dropped its investigation into the smart contract protocol, reportedly to avoid embarrassment, according to Consensys attorney Laura Brookover.
Moreover, this regulatory clarity could further bolster investor confidence in Ethereum, especially as the launch of Ethereum ETFs nears.
The Kaiko report and analysts’ predictions underscore the potential for Ether to outperform Bitcoin, driven by institutional demand and regulatory developments. Furthermore, the impending launch of Ethereum ETFs could significantly impact the market, attracting substantial inflows and potentially leading to a new era of price performance for Ether.
The market eagerly anticipates the SEC’s final decision, with the potential ETF launch poised to transform the landscape for Ether and its investors.
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