Key Points
- Ethereum is expected to outperform Bitcoin in the short term due to the anticipation of spot ETF trading.
- The Ethereum market is undergoing a longer re-evaluation period and price adjustment.
Ethereum is predicted to gain more value compared to Bitcoin in the near future. This is largely due to the expected introduction of spot exchange-traded fund (ETF) trading, which is drawing investors’ attention to Ethereum, the second-largest digital currency by market capitalization.
Joshua Lim, co-founder of Arbelos Markets, believes the Ethereum to Bitcoin ratio will continue to rise, currently standing at 0.056. This ratio has been steadily increasing from 0.045 in mid-May, prior to the unexpected approval of eight spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) last week.
Ethereum ETFs and Market Reaction
Unlike Bitcoin ETFs which began trading the day after their approval, the Ethereum ETFs might not be activated for a few weeks or even months. K33 Research supports Lim’s view, stating that Ethereum is well positioned for strength against Bitcoin until the Ethereum ETFs are launched.
K33 Research’s recent market report suggests that current conditions favor an increase in Ethereum exposure. The firm compares Ethereum’s current strength to Bitcoin’s price dynamics in the months leading up to the approval of its ETF.
Re-evaluation of Ethereum Market
Lim further commented that Ethereum is going through a prolonged re-evaluation phase and price adjustment. He believes that Ethereum has been an under-owned asset for a long time, leading to a longer re-rating rotation.
Following the approval of the Ethereum ETF, other high market-cap assets are also gaining attention. There has been a noticeable increase in legacy proof-of-work coins as the market begins to factor in the higher probability of ETFs for a wider range of crypto assets.
Despite the positive outlook, Ethereum’s price has decreased by over 2.7% in the past 24 hours, trading at $3,839. The GM 30 Index, which represents a selection of the top 30 cryptocurrencies, also fell by 2.67% to 145.40 during the same period.
