The underwhelming performance of new Ethereum futures exchange traded funds (ETFs) has led analysts at K33 Research to urge investors to “rotate back” into Bitcoin (BTC). In a market report released on October 3, researchers Anders Helseth and Vetle Lunde highlighted the fact that the initial trading volume of Ether futures ETFs was only 0.2% of what the ProShares Bitcoin Strategy ETF (BITO) achieved on its first day of trading in October 2021.
While it was not expected for the trading volume of Ether ETFs to match that of Bitcoin ETFs, the first-day numbers were far below expectations. This lack of institutional interest in Ether ETFs prompted Lunde to revise his previous advice of increasing ETH allocation to capitalize on the ETF hype. Lunde emphasized that increased institutional access will only lead to buying pressure if there is significant unsatisfied demand, which is currently not the case for Ether.
Lunde also discussed the short-term price outlook for the crypto market. He stated that most cryptocurrencies lack meaningful price catalysts and are likely to continue moving sideways in the foreseeable future. In his view, this landscape is more favorable for Bitcoin, as it has the potential for ETF approval early next year and the halving event scheduled for mid-April, which are viewed as positive factors for the leading cryptocurrency.
Ben Laidler, the global markets strategist at eToro, offered a similar perspective on the future of crypto assets. He mentioned that current macro trends, such as the actions of the Federal Reserve and oil prices, could potentially have a downward impact on prices. Laidler noted that with oil prices rising again, it could cool down sentiment in the market.
In summary, the lackluster performance of Ethereum futures ETFs has led analysts to recommend shifting focus back to Bitcoin. The researchers believe that the current market conditions, along with upcoming events like the ETF approval potential and the halving event, make Bitcoin a more attractive investment option compared to other cryptocurrencies. However, bearish sentiment based on macro trends, such as oil prices, could impact the overall market sentiment in the near future.