Over the past month, Ethereum (ETH) has seen a significant surge of 17%, outperforming Bitcoin (BTC) which only experienced a 2.5% increase during the same period. The initial excitement surrounding the approval of Bitcoin ETFs by the US Securities and Exchange Commission (SEC) seems to have faded as BTC has witnessed a 5% drop in the last week.
QCP Capital, a crypto trading firm, has noted that after the approval of Bitcoin ETFs, attention has shifted towards the potential launch of an ETH spot ETF. This could be one of the reasons why Ethereum is outperforming Bitcoin.
Ethereum Gains Ground Against BTC
According to QCP Capital, the total volumes transacted across all 11 ETFs in the past week have reached $9.8 billion, with Grayscale Bitcoin Trust (GBTC) accounting for $4.6 billion. Since converting from a Trust to an ETF, GBTC has experienced outflows of $1.17 billion. BTC initially surged to $49,100 upon ETF approval but has since declined and is now consolidating above the $40,000 support level.
On the other hand, ETHBTC has seen an upward trend from below 0.05 to 0.06. QCP Capital predicts that Ethereum will continue to outperform Bitcoin in the medium term as focus shifts towards potential ETH Spot ETF approvals.
Bitcoin Forward Contract Yields Decrease
BTC forward contracts have experienced a greater decline compared to ETH forward contracts following the launch of the BTC spot ETF. The BTC 1-month forward fell from 32% annualized to 9%, while ETH 1-month forward decreased from 28% to 12%. Despite declining yields, ETH forwards still offer attractive returns at 11-13% annually. Selling ETH 1-month 2200 Puts also presents a viable option with yields above 21% annually.
QCP Capital suggests that the forthcoming BTC halving in mid-April and the potential approval of ETH Spot ETFs from May will be significant events for the crypto market. Market movements may also be influenced by macroeconomic events such as the January Federal Open Market Committee (FOMC) meeting and the February Non-Farm Payrolls (NFP) and Consumer Price Index (CPI) reports.
Hot Take: Potential Impact of Ethereum Spot ETF
The potential launch of an Ethereum spot ETF has generated speculation and could have a transformative impact on the Ethereum ecosystem. As the market adapts to changing dynamics, attention remains on key events such as the BTC halving and potential ETH Spot ETF approvals.
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