BloFin, a crypto exchange, is predicting a short-term surge in Ethereum (ETH) prices due to the upcoming launch of spot Ethereum exchange-traded funds (ETFs) in the United States. This shift in focus from Bitcoin to Ethereum by investors is expected to drive ETH prices up, according to a research note shared with CryptoSlate on June 26, 2024.
The approval of key filings for spot ETH ETFs by the US Securities and Exchange Commission (SEC) last month has surprised many in the market. Rumors suggest that these financial instruments could start trading as soon as the first week of July after engaging with the regulator’s staff.
BloFin analysts have noted a bullish trend in Ethereum’s short-term price expectations compared to Bitcoin. While investors remain optimistic about Bitcoin’s medium and long-term performance, they are showing more bullish sentiments towards Ethereum in the short term. This shift is driven by the potential for higher returns, especially in assets with low market caps and high volatility during interest rate cut cycles.
The firm also anticipates a positive impact on ETH’s price during the “asset allocation period” following the approval of spot Ethereum ETFs, similar to Bitcoin’s experience earlier in the year. The forward exchange rate term structure of ETH/BTC suggests that investors believe ETH will outperform BTC in the coming months, leading to a higher exchange rate in the short term.
On-chain data further supports BloFin’s bullish outlook, as ETH whales have stopped selling their holdings while BTC whales continue to reduce theirs. This change could be attributed to miners selling BTC for cash and investors readjusting their portfolios in anticipation of the spot Ethereum ETFs listing.
Overall, BloFin’s analysis points towards a short-term surge in ETH prices driven by the imminent launch of spot Ethereum ETFs in the US. Investors are shifting their attention from Bitcoin to Ethereum, expecting higher returns and positive price movements in the second-largest crypto asset by market capitalization.