- 1 A recent report from K33 remarked how the Bitcoin futures ETF is preferred over the Ethereum futures ETF.
- 2 The first Bitcoin futures ETF, released in 2021, accumulated only $1 Billion in trading volume.
- 3 Nine Ethereum futures ETFs launched collectively on October 2, 2023, collected $2 Million in trading volume.
Crypto-based exchange-traded funds do not follow the same excitement following the launch. A recent example came in the wake of Ethereum futures ETFs that struggled to garner volume. It was in huge contrast to Bitcoin futures ETF’s first-day trading volume. Such deductions presented in a recent report from K33 research suggest to halt putting a wager on Ethereum and go for Bitcoin instead.
The report titled Underwhelming Demand for Ether ETFs by senior analyst Vetle Lunde and Vice President Anders Helseth was released on October 3, 2023. It noted the recently launched Ethereum futures ETFs were expected to perform relatively better in comparison to the first Bitcoin futures ETF.
ProShares Bitcoin Strategy ETF (BITO) was the first Bitcoin futures ETF, released in 2021, and it accumulated $1 Billion in trading volume. The major factors for the ETF to hit such significant numbers could include its timing of release during the height of the last bull market.
On the flip side, even nine Ethereum futures ETFs launched collectively on Monday, October 2, 2023, reportedly collected $2 Million in trading volume. This accounts for 0.2% of what BITO’s volume accumulated within a day of launch.
Citing the instance, the K33 report notes that, a distance should be kept from Ethereum (ETH) and “rotate back into BTC.”
Analysts asserted that though it was expected Ethereum futures ETFs might not see similar success akin to Bitcoin futures ETFs, the actual numbers on the first day of launch were quite “underwhelming.”
Lunde explains the reason behind this is that ETH futures ETFs facilitate exposure to crypto investments to traditional investors. As a result, it provides an increased institutional access which ultimately leads to creating buying pressure if the unsettled demand in the market sustains for long.
ETFs and Halving to Favor Bitcoin (BTC)
Analysts explain potential ETFs and upcoming halving events to favor Bitcoin (BTC) a lot in the time to come. This brings the flagship cryptocurrency a competitive advantage over any other digital asset across the broader market.
The next Bitcoin halving—an event that slashes down mining reward to half—is likely to take place in April 2024. Halving is treated as a catalyst event to push the price of the cryptocurrency higher. Historically, BTC attained new all-time highs in the coming months after halving took place.
Another considerable factor of spot Bitcoin ETFs is likely to play a significant role in keeping the crypto asset’s prices up. Lunde expects to see one such investment vehicle as early as next year. Many traditional finance players filed with the SEC for launching a spot BTC ETF that is awaiting approvals.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.