July 3, 2024 at 14:45 GMTModified date: July 3, 2024 at 14:45 GMT
July 3, 2024 at 14:45 GMT

Ethereum forecast to outshine Bitcoin after ETF debut

Analysts note that while Bitcoin may face selling pressure due to $8.5 billion being returned to creditors of the collapsed exchange Mt. Gox, Ether’s price action is poised for a significant boost from the new ETFs.

Ethereum forecast to outshine Bitcoin after ETF debut

K33 Research analysts have predicted that Ethereum ($ETH) will outperform Bitcoin ($BTC) in the weeks following the launch of spot Ether exchange-traded funds (ETFs) in the United States.

The ETFs are now expected to debut as early as 8 July in the country. Prominent analysts like Vetle Lunde and David Zimmerman have come forward in highlighting its potential positive impact on Ether’s price.

They note that while Bitcoin may face selling pressure due to $8.5 billion being returned to creditors of the collapsed exchange Mt. Gox, Ether’s price action is poised for a significant boost from the new ETFs.

Lunde and Zimmerman suggested that the ETF launch represents a “golden egg” for Ether, contrasting it with Bitcoin’s potential challenges.

They point to historical trends where Bitcoin has often experienced price rallies and increased market attention following the introduction of spot ETFs.

Despite the initial possibility of price stumbling immediately after the ETFs’ launch, they anticipate strong inflows to the funds. This could then bolster Ether’s market position through the summer months.

Historical underperformance 

For over a year, Ethereum has lagged behind Bitcoin in terms of price performance. Bitcoin has benefited from substantial flows into its spot ETFs, amounting to over $14 billion in 2024 alone. 

In contrast, ETH/BTC prices have reflected a declining trend, with Ethereum reaching a yearly low relative to Bitcoin on 24 May. 

However, the recent approval of Ether ETFs by the SEC has already shown signs of reversing this trend. 

TradingView data indicates a notable uptick in ETH/BTC ratio, currently standing at 0.055.

Despite these promising indicators, Lunde and Zimmerman acknowledge that market sentiment remains cautious. 

They point out that Ether futures continue to trade at a relative discount compared to Bitcoin futures, suggesting lingering scepticism among traders. 

However, they emphasise that futures open interest for Ether remains resilient, indicating significant trader interest and the potential for leveraged positions ahead of the ETFs’ launch.

Embroiled in phishing scam

In other news, the Ethereum Foundation disclosed a security breach on 23 June. The foundation’s email account, used for updates, was hacked to promote a phishing scam, affecting over 35,000 people. 

Although no cryptocurrency losses were reported, the email addresses of 81 subscribers might have been compromised. 

The phishing emails falsely claimed a partnership between the Ethereum Foundation and LidoDAO, promising a 6.8% annual return on staked cryptocurrency. 

The scam used a malicious link designed to drain users’ wallets if they connected their crypto wallets and signed the transaction.

However, the foundation has now regained control of the email account and stopped the distribution of malicious emails. 

An investigation revealed that the attackers combined their own email list with addresses stolen from the foundation’s mailing list.

Nevertheless, the upcoming launch of Ether ETFs is expected to be a pivotal moment for Ethereum, potentially setting the stage for a period of outperformance compared to Bitcoin. 

K33 Research’s optimistic outlook on Ether’s prospects post-ETF launch contrasts with the cautious market sentiment observed in recent months. 

While Ethereum has historically struggled to keep pace with Bitcoin’s price performance, the analysts anticipate a reversal fueled by increased investor interest and fund inflows.

However, the cryptocurrency market remains volatile and susceptible to external factors, as highlighted by the phishing attack on the Ethereum Foundation. 

In short, while Ethereum prepares for potential gains following the ETF launch, stakeholders must remain vigilant amid evolving market dynamics and cybersecurity threats. 

The convergence of these factors will likely shape Ethereum’s performance in the coming months, providing valuable insights into its role within the broader cryptocurrency market.