Ramazan Eles 
The launch of spot Ether exchange-traded funds (ETFs) in the United States could see Ethereum outperform Bitcoin, according to analysts. Vetle Lunde and David Zimmerman, analysts at K33 Research, said in a July 2 report that these ETFs are a “golden egg” for Ether, while Bitcoin could face selling pressure from the repayment of $8.5 billion worth of Mt. Gox creditor claims. The ETFs are expected to launch on July 8.
Current Market Landscape
Over the past year, Ether has underperformed Bitcoin. Bitcoin has gained market dominance with over $14 billion in inflows to spot ETFs in 2024. This dynamic has created a significant divergence between the two leading cryptocurrencies. However, the anticipated launch of Ether ETFs could reverse this trend.
Short-Term Volatility and Long-Term Outlook
Lunde and Zimmerman acknowledge that it is reasonable to expect ETH prices to “stumble” immediately after the launch of the ETFs. This short-term volatility mirrors the pattern observed during Bitcoin ETF launches. However, the analysts believe that inflows into spot funds will support ETH’s price over time. They maintain a bullish outlook on ETH, stating that they expect net inflows equivalent to 0.75-1% of ETH’s circulating supply in the five months following the ETF launch.
Lunde wrote, “ETFs are a solid catalyst for ETH’s relative strength as flows accumulate over the summer.” He sees current ETH/BTC prices as an attractive opportunity for patient investors.
Market Sentiment and ETH/BTC Dynamics
Despite the analysts’ bullish outlook, the market does not seem to be “stubbornly” following suit. This sentiment is evident in the fact that Ether futures are trading at a discount to Bitcoin futures, and ETH is trading at 0.055 BTC per 1 ETH. Over the past 12 months, ETH’s value has been steadily declining relative to Bitcoin, reaching an annual low of 0.045 on May 24. However, following the SEC’s approval of Ether ETFs, Ether’s price against Bitcoin quickly reversed course, surprising analysts and pushing the ETH/BTC pair to 0.055.
Leverage and Market Expectations
Despite the reversal, Lunde and Zimmerman note that open interest in Ether futures remains “relentlessly” high. This suggests that many investors are using high leverage to bet on ETH’s potential price action leading up to the ETF launch. This high leverage reflects a strong belief among investors that Ether will outperform following the ETF launch.
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