A new report by Kaiko paints a bullish picture for Ether (ETH) in the wake of the highly anticipated launch of Ethereum exchange-traded funds (ETFs) in the United States. The report dives into key metrics that suggest Ether could outperform its dominant counterpart, Bitcoin (BTC).
The Kaiko report highlights the Ether to Bitcoin Price Ratio, a crucial metric that tracks the amount of Bitcoin needed to buy one Ether unit. As this ratio climbs, it signifies a relative price increase for Ether compared to Bitcoin. Currently, the ratio sits at 0.05, demonstrating a rise from the pre-SEC approval level of 0.045. This shift suggests growing investor confidence in Ether.
The report also emphasizes Ether’s shallow market depth, measured by its 1% market depth metric. Market depth reflects the level of liquidity available for an asset. A shallow market, as seen with Ether currently, translates to increased volatility. However, Kaiko suggests this could be a catalyst for a future price surge.
The report bolsters its bullish thesis by pointing to the dwindling reserves of Ether on cryptocurrency exchanges. This metric, known as the Ethereum Exchange Reserve, sits at multi-year lows. Kaiko reasons that with institutions aiming to fill their Ethereum ETF baskets, this low supply could trigger a supply shock, pushing prices significantly higher as demand outpaces available Ether.
The spotlight remains firmly on the imminent launch of spot Ethereum ETFs. Bloomberg’s senior ETF analyst, Eric Balchunas, maintains his prediction of a July launch window. Based on Balchunas’ insights, the SEC requested amended S-1 forms (registration statements) from applicants by July 16th, potentially paving the way for a launch date as early as July 23rd.
Institutional investor Tom Dunleavy recently shared his bullish outlook with Cointelegraph. He anticipates significant inflows of $10 billion into Ethereum ETFs, with a projected rate of roughly $1 billion per month. This substantial institutional interest further strengthens the case for a potential price surge in the wake of the ETF launch.
The regulatory status of Ether, whether it’s a commodity or a security, has been a contentious issue. However, in June, the SEC reportedly dropped its investigation into the Ethereum smart contract protocol. Conensys attorney Laura Brookover suggests this move may have been a face-saving measure for the SEC.
Meanwhile, Rostin Behnam, chairman of the Commodities Futures Trading Commission (CFTC), recently weighed in on the debate, asserting that Ether falls under the CFTC’s purview as a commodity. This stance may offer greater regulatory clarity for the Ethereum market going forward.
