Experts call for return to BTC as Ether ETFs’ debut disappoints

gold and silver round coins – A pile of Bitcoin coins. – unsplash

Experts at wealth management platform K33 Research have suggested investors should “rotate back” to Bitcoin (BTC). The call came as trading volumes across nine new Ethereum futures exchange-traded funds (ETFs) amounted to less than $2 million.

Ether ETFs from issuers such as ProShares, VanEck and Bitwise went live at the beginning of this week. This allows investors to invest in digital assets without a crypto custodian, exchange account, or wallet.

However, their first-day performance was just a fraction of their Bitcoin counterparts in October 2021. Ether ETFs amassed only $8.5 million, while ProShares Bitcoin Strategy ETF (BITO) and ProShares Short Bitcoin Strategy ETF (BITI) recorded a combined post-launch trading volume of $576.5 million.

While experts never expected the number to come close, especially since the Bitcoin futures ETF was launched during a bull market, Ether futures ETFs’ performance missed expert expectations by a wide margin.

Staying ‘Ahead of the Curve’

In the latest “Ahead of the curve” weekly report released on October 3, K33 senior analyst Vetle Lunde and head of research Anders Helseth encouraged investors to consider ditching ETH for BTC.

“We believe it’s time to pull the breaks on ETH and rotate back into BTC,” they said. “We no longer see a strong bull case for ETH/BTC in the short term.”

Lunde and Helseth argued that the ETH futures ETF launch serves as a reminder for the community to evaluate the impact of easier access to crypto investments for traditional investors. Lunde wrote, “Increased institutional access will only create buying pressure if significant unsatiated demand exists.”

The K33 analysts believe the current crypto market lacks short-term price catalysts, causing it to remain on its sideways trajectory. The only exception is Bitcoin, which could soon see spot BTC ETF listings and is welcoming a halving event scheduled for mid-April.

According to CoinDesk Indices data, Ethereum prices have slid about 2.4 percent so far in October to $1,640. In the meantime, Bitcoin recorded a 1.4 percent increase over the same time frame and is also outperforming ETH on a weekly, monthly and yearly basis.

Analysts from Matrixport pointed out in a Wednesday market update that the decreasing activity on Ethereum and the native token’s relapse to being inflationary could weigh further on its prices.

Furthermore, last month, Ethereum’s network revenues dropped to the lowest level since December, when ETH was traded at $1,200. This suggests that the digital currency could be overpriced by around 30–40 percent at its current prices of around $1,600–$1,700.

Obstacles for crypto

While Bitcoin remains the top choice for long-term crypto investment, Ben Laidler, a global markets analyst at eToro, pointed out that macroeconomic factors might act as a downward pressure on the prices of popular crypto assets in the future.

Laidler explained that the Federal Reserve and oil prices have been powerful macro influencers in the crypto market.

“At the late stage of the rate hike cycle we’re in, the market is looking for further good news to push on, but with oil prices rising again, this could have a cooling effect on sentiment,” he said.