Kaiko Analytics Firm Suggests Ethereum Bull Market Speculation is Yet to Begin

Crypto Analytics Firm Kaiko: Speculative Fervor on Ethereum Yet to Begin

Crypto analytics firm Kaiko suggests that Ethereum (ETH) has not yet experienced aggressive speculation, despite its recovery from 2022 lows. While Bitcoin has benefited from the hype surrounding the approval of BTC exchange-traded funds (ETFs) in the US, speculation on an Ethereum ETF has not yet taken off.

Slow Progress on Ethereum ETF Approval

The US Securities and Exchange Commission (SEC) recently delayed its decision on Fidelity’s spot market Ethereum ETF application until March. Kaiko notes that while there is some hype around ETH ETF applications, data shows that aggressive speculation has not yet begun. ETH trade volume has increased, but derivatives markets do not show signs of traders positioning for a rally.

Spot Markets Driving ETH Moves

Kaiko also highlights that derivatives data indicates recent ETH price movements have been driven by spot markets rather than perpetual futures. This suggests that traders are not leveraging in anticipation of an ETH ETF. Open interest in futures markets fell in September and October, with little price movement and neutral funding rates. Funding rates have since reset to neutral, and open interest has increased ahead of price, indicating increased shorting.

Conclusion

Despite the recovery in ETH price, speculative fervor on Ethereum has not yet taken off. The delay in approving an Ethereum ETF and the lack of leverage in derivatives markets indicate that aggressive bull market speculation is yet to begin.

Hot Take: Ethereum Awaits Catalyst for Enthusiasm

Ethereum’s future is uncertain as it awaits a catalyst to spark enthusiasm among investors. While Bitcoin experienced significant growth with the introduction of ETFs, it remains to be seen if Ethereum can replicate this success. However, Ethereum has multiple narratives to lean on, such as new Layer-2 solutions or the success of projects like EigenLayer and restaking. Only time will tell if these factors can generate the same level of excitement as ETFs did for Bitcoin.