Ether will continue to outperform bitcoin in near term, says crypto asset manager
Quick Take
- Ether will gain value relative to bitcoin, with the ETH/BTC ratio increasing to 0.06, one investment manager said.
- The ether-to-bitcoin ratio has spiked since last week’s approval of spot ether ETFs.
Ether will continue to gain value relative to bitcoin in the near term, as anticipation of spot exchange-traded fund (ETF) trading draws investor interest to the second-largest digital asset by market cap, according to one investment manager.
"
ETH
-1.55%
/
BTC
-2.10%
ratio probably keeps marching up to 0.06," Arbelos Markets co-founder Joshua Lim told The Block.
Currently, the ratio is 0.056, having steadily climbed from a multi-month low of 0.045 in mid-May before the surprise approval of eight spot ether ETFs by the U.S. Securities and Exchange Commission (SEC) last week. The SEC approved the ether spot ETFs on Thursday, but unlike bitcoin ETFs, which started trading the day after approval, the ether ETFs may not go live for a few weeks or months.
The ether to bitcoin ratio has increased since last week's approval of spot ether ETFs. Image: Google Finance.
Lim's opinion is echoed by K33 Research, which said that ether is well positioned for relative strength versus bitcoin until the spot ether ETFs are launched. Tuesday's K33 market report favors increased ether exposure for now.
"Conditions are currently favoring overweight ether exposure, and the asset's current strength resembles
bitcoin’s price action in the months leading to BTC’s ETF approval. The next weeks will see filers pursuing investors to secure a solid seed and traction for the eventual ETF launch, while ether is only indirectly exposed to the massive creditor repayments stemming from the Mt. Gox estate. So, this favors continued relative strength in ether until the ETF launch," the K33 Research analysts said.
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Ether undergoing re-rating rotation
Lim added that the ether market is undergoing a longer re-evaluation period and price adjustment. "I think ether has been such an under-owned asset for so long that we are seeing a longer re-rating rotation," Lim added.
Other high market-cap assets also appear to be gaining attention after the ether ETF approval. "Notably, there was an uptick across legacy proof-of-work coins, as the market has started to price in an increased probability of ETFs on a broader universe of crypto assets," he said.
Ether's price decreased by over 2.7% in the past 24 hours and was changing hands for $3,839 at 12:28 p.m. ET, according to The Block’s Price Page. The GM 30 Index, representing a selection of the top 30 cryptocurrencies, decreased by 2.67% to 145.40 in the same period.
The ether price decreased by 2.7% in the past 24 hours. Image: The Block.
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