The lackluster performance of nine new Ethereum futures exchange-traded funds (ETFs) has led analysts at K33 Research to recommend a shift back to Bitcoin (BTCUSD).
In their market report dated October 3rd, analysts Anders Helseth and Vetle Lunde suggested it’s time to pump the brakes on Ethereum (ETH) and pivot back to Bitcoin. They pointed out that the initial trading volume of Ether futures ETFs accounted for only 0.2% of what the ProShares Bitcoin Strategy ETF (BITO) amassed on its first day of trading in October 2021.
Although the analysts acknowledged that no one anticipated Ethereum’s initial trading volume to rival that of Bitcoin futures ETFs, which were launched during a strong bull market, the underwhelming numbers significantly fell short of expectations.
This lack of institutional interest in Ether ETFs caused Lunde to retract his earlier advice of increasing ETH allocation to maximize gains from the ETF hype. Lunde emphasized an essential lesson from the ETH futures ETF launch: institutional access to cryptocurrencies will drive buying pressure only if there’s substantial unmet demand, which isn’t the case for Ethereum at the moment.
In a section of the report titled “More Chop Ahead,” Lunde explained that the crypto market largely lacks short-term catalysts and is likely to continue trading sideways for the foreseeable future. According to Lunde, this environment is more favorable for Bitcoin. Bitcoin has the potential for ETF approval early next year and a scheduled halving event in mid-April.
Lunde believes that, for the time being, Bitcoin remains the center of gravity in the crypto space, with promising events on the horizon, making it conducive to aggressive accumulation.
Ben Laidler, global markets strategist at eToro, shared a similar outlook for crypto assets but with a slightly bearish sentiment. Laidler mentioned that current macro trends, particularly actions by the Federal Reserve and rising oil prices, could potentially exert downward pressure on the prices of established cryptocurrencies like Bitcoin.
He noted that oil price increases, in particular, could cool sentiment in the market during the late stage of the rate hike cycle.