Ethereum’s Price Volatility to Surpass Bitcoin
Ethereum is expected to undergo more significant price fluctuations compared to bitcoin going forward. This is evident in the higher options volatility premium for the second-largest cryptocurrency by market capitalization according to analysts at QCP Capital.
Increased Volatility Premium for Ethereum
- The volatility premium of Ethereum over bitcoin has recently expanded to around 8% for longer maturity dates, up from 4% just a week ago, as indicated by QCP Capital analysts.
- These analysts have also expressed a strong preference for accumulating Ethereum over bitcoin, attributing it to the relatively cost-effective spot price of Ethereum in light of the rising implied volatility of the asset.
Ethereum’s Resilience Against Market Uncertainty
Despite the recent caution in the market following the transfer of 30,000 BTC worth approximately $2 billion by the U.S. government to an undisclosed wallet, Ethereum has managed to hold its ground compared to bitcoin. This observation was noted by QCP Capital analysts, who highlighted the following:
- Since Trump’s speech, Ethereum has outperformed bitcoin with the ETH-BTC trade surging by 5%, despite facing four consecutive days of spot exchange-traded (ETF) outflows.
- Spot Ethereum ETFs experienced significant net outflows, with Grayscale’s ETHE recording $1.5 billion in outflows in its inaugural week. In contrast, competing funds like BlackRock’s ETHA and Bitwise’s ETHW saw over $1 billion in net inflows.
Potential for Upward Momentum
Although Grayscale’s ETHE faced substantial outflows, QCP Capital analysts believe that if these outflows diminish and daily inflows into Ethereum ETFs rise, there is a strong possibility for Ethereum to experience a significant uptrend in the near future.
Ethereum’s current trading price sits at $3,354 at the time of writing.
Hot Take: Ethereum’s Future Path
Ethereum’s price volatility is forecasted to surge beyond bitcoin, offering potentially lucrative opportunities for investors to capitalize on market fluctuations and demand for the second-largest cryptocurrency in the coming months.
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