On October 3, K33 Research analysts Anders Helseth and Vetle Lunde suggested a shift away from Ethereum (ETH) and a return to Bitcoin (BTC) in light of the lackluster performance of nine newly launched Ethereum coins. The catalyst for this recommendation was the unimpressive initial trading volume of the Ethereum Futures ETF, which accounted for just 0.2% of ProShares' total trading volume. This is in stark contrast to the Bitcoin Strategy ETF (BITO), which accumulated substantial funds on its first day of trading in October 2021.
The analysts acknowledged that it was unrealistic to expect Ethereum's futures ETF to match the intense demand experienced by the Bitcoin futures ETF during a bullish market. However, the underwhelming initial trading volumes were significantly below expectations, prompting the shift in their stance. Lunde, who had previously recommended increasing allocations to ETH, abandoned this idea due to the lack of institutional interest in the Ethereum ETF. He emphasized that institutional access will only create buying pressure if there is significant unmet demand, which currently does not apply to ETH.
In a section of the report titled "Moving Further," Lunde noted that most cryptocurrency markets lack significant short-term price catalysts, leading to a likely sideways trend in the near future. In this context, Lunde highlighted Bitcoin's favorable position, with ETF approval expected early next year and a halving event projected for mid-April. The report emphasized the gravitational pull of Bitcoin in the cryptocurrency space, indicating that Bitcoin remains the primary focus, especially in the absence of significant short-term drivers.
Ben Laidler, global market strategist at eToro, shared a similar outlook for crypto assets, albeit with a slightly more bearish sentiment. Laidler pointed out that current macroeconomic trends, including actions by the Federal Reserve and rising oil prices, could potentially have a cooling effect on sentiment and downside implications for mainstream crypto assets like Bitcoin.
