According to K33 Research analysts, the lackluster performance of nine new Ethereum futures exchange traded funds (ETFs) has prompted a recommendation to “rotate back” into Bitcoin (BTC). In their market report, analysts Anders Helseth and Vetle Lunde advise pulling the brakes on ETH and reallocating into BTC. The initial trading volume of Ether futures ETFs accounted for only 0.2% of the trading volume amassed by the ProShares Bitcoin Strategy ETF (BITO) on its first day of trading in October 2021.
While the analysts acknowledge that nobody expected the initial trading volume of Ether futures ETFs to come close to that of Bitcoin futures ETFs, which were launched during a bullish market, the underwhelming first-day numbers greatly missed expectations.
The underwhelming institutional interest in Ether ETFs led Lunde to backtrack on his previous advice of increasing ETH allocation to capitalize on the ETF hype. The launch of ETH futures ETFs serves as a crucial lesson in evaluating the impact of easier access to crypto investments for traditional investors. According to Lunde, increased institutional access will only create buying pressure if there is significant unsatiated demand, which is not the case for ETH at the moment.
Lunde goes on to explain in the report that the crypto market lacks meaningful short-term price catalysts and is likely to continue its sideways trajectory in the foreseeable future. In his view, this landscape is more favorable for Bitcoin, which has the potential for ETF approval early next year and the upcoming halving event scheduled for mid-April.
Ben Laidler, global markets strategist at eToro, also sees a similar path ahead for crypto assets, but with a slightly more bearish sentiment. According to Laidler, current macro trends, such as the actions of the Federal Reserve and oil prices, could potentially trigger a downward movement in prices for mainstay crypto assets like Bitcoin. With oil prices on the rise again, sentiment in the market may cool off.
Overall, the analysts at K33 Research and eToro suggest that Bitcoin is currently the more favorable crypto asset, both in terms of potential events and overall market sentiment. The lack of demand for Ethereum ETFs and the absence of significant short-term catalysts make Bitcoin the preferred choice for investors looking for potential gains in the crypto market.