The anticipated debut of spot ether exchange traded funds should bolster the token's performance versus bitcoin, according to research from analytics firm Kaiko.
The anticipated debut of spot ether exchange traded funds (ETFs) is set to bolster the token's performance vis-a-vis bitcoin, according to new analysis from Kaiko.
The firm noted that the ether-to-bitcoin ratio — a measure that compares the two leading cryptocoins — has risen significantly since regulators approved the ETFs in May.
Specifically, the ratio has risen from 0.045 to 0.05, and has remained elevated, Kaiko said in a report on Tuesday.
"Put another way, it takes more bitcoin to purchase one ether token — a trend that is only expected to deepen when the ETFs come online, which is expected to happen as soon as next week," the firm added.
"Even though ether's price has swung both ways since May, the ratio indicates that the token is primed for upside."
Meanwhile, CME Group highlighted that interest in ether drove crypto trading activity in the second quarter.
"Traders began utilizing Ether/Bitcoin Ratio futures more than ever in Q2 as ether's performance improved relative to bitcoin's performance. Over $260M in notional value was traded," the exchange operator noted.
"Ether futures achieved record open interest of 7.6K contracts ($1.3B notional) on June 24 and a record $2.85B traded on May 21."
Wall Street has largely celebrated the upcoming launch of ether ETFs, due in part to the success notched by this year's spot bitcoin funds.
However, some have noted that ether boasts features that should boost demand for it — such as an annual yield and more functionality — offers not seen in bitcoin.
"Demand will shift into ether for sure, but I think the supply side will also play a role in tightening the bitcoin-ether price ratio," SynFutures CEO Rachel Lin said in May.
"Overall, I know the market is bullish on Ethereum right now, but it's not bullish enough. Now the spot ETH ETF is approved, all indicators suggest a massive ETH bull run in the coming months."
By her estimate, ether could reach as high as $22,500 this cycle, marking a 550% increase from current levels.
Moreover, these new ETFs are expected to be less exposed to the headwinds faced by spot bitcoin ETFs.
For example, Standard Chartered pointed out that big outflows are less likely, given smaller reasons for forced selling.
Ether was last down 1.02% at $3,450.22 as of 1p.m. ET on Tuesday. The token is up over 51.79% for the year.
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