- A new report suggests that the continuous high premiums in Bitcoin futures indicate that Ethereum will continue to underperform Bitcoin throughout the year.
- Lunde and Helseth state that they do not expect the SEC to reconsider the application of Grayscale’s Grayscale Bitcoin Trust (GBTC) to convert it into a spot Bitcoin ETF.
- Ethereum, like many other alternative cryptocurrencies, has shown low performance in the spot market for another week with low trading volume and decreasing volatility compared to Bitcoin.
According to research from K33, Ethereum’s price may continue to underperform Bitcoin for a long time. Here are the details!
Ethereum May Sustain Its Underperformance
According to a new report, continuous high premiums in Bitcoin futures indicate that Ethereum will continue to underperform Bitcoin throughout the year. Vetle Lunde, Senior Analyst at K33 Research, and Vice President Anders Helseth mentioned in their latest report, “The explanation for this could be that in a risk-free environment, Bitcoin, as digital gold, may soon be more attractive than Ether, associated with DeFi and NFTs, especially with the potential of spot Bitcoin ETFs.” The analysts continued:
“I guess until there’s clear evidence of a spark in Ether, sticking to Bitcoin is probably the safest risk right now.”
Lunde and Helseth stated that they do not expect the SEC to reconsider the application of Grayscale’s Grayscale Bitcoin Trust (GBTC) to convert it into a spot Bitcoin ETF. This situation could lead to a strong short-term market reaction, followed by a focus on the next spot Bitcoin ETF applications as decision timelines are postponed; these applications include those from firms like BlackRock, Fidelity, VanEck, and Invesco.
Last week, Bloomberg Senior ETF Analyst Eric Balchunas suggested that the SEC is actively working with issuers on matters such as redemptions, custody, and legal aspects, predicting a 75% chance of approval by the end of this year and 90% by March 2024.
Ethereum, like many other alternative cryptocurrencies, has shown low performance in the spot market for another week with low trading volume and decreasing volatility compared to Bitcoin. Unsatisfactory Ether futures ETF launches accelerated Ether’s underperformance against Bitcoin, causing it to drop by 5% against the US dollar last week, trading at the lowest level in 14 months, at 0.057.
Bitcoin, on the other hand, remained almost stagnant at 0% during the same period, but its market dominance is approaching multi-year highs. Binance Coin (BNB), the third-largest cryptocurrency by market capitalization, decreased by 3%.
Derivatives market is more positive but still not bullish
On the positive side, K33 mentioned that the offshore funding rates and CME futures premiums increased last week, and the skew for 6-month Bitcoin options showed strong demand for call options.
However, according to K33, the derivatives market is still not showing strong bullish signals. Offshore funding rates are consistently below the neutral level, and changes in Bitcoin futures premiums from the ETF are presenting a more cautious picture.
Bitcoin futures experienced a 9.4% five-day volatility rate last week, the second-highest in 2023, coming with changes in Bitcoin premiums at CME. Nevertheless, increased activities have struggled to navigate in a market with no significant directional momentum, and issues related to stable market conditions have occurred, according to analysts.
