Underwhelming Launch of Ether Futures-Based ETFs
The launch of ether futures-based ETFs did not live up to expectations, with trading volume only reaching 0.2% of the volume seen when bitcoin futures ETFs debuted in 2021. According to a report by K33 Research, it may be time to shift focus back to BTC as they no longer see a strong bull case for ETH/BTC in the short term.
Ether Futures ETFs Go Live
Firms like VanEck, ProShares, and Bitwise recently launched ether futures ETFs, providing investors with exposure to the asset without requiring a crypto custodian or exchange account. VanEck introduced its Ethereum Strategy ETF, ProShares launched its ProShares Ether Strategy ETF and two blended bitcoin and ether funds, and Bitwise released the Bitwise Ethereum Strategy ETF and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF.
Disappointing Performance Compared to Bitcoin Futures ETFs
The performance of the ether futures ETFs fell short of expectations. Post-launch, these ETFs only managed to accumulate $8.5 million in assets under management, while bitcoin futures ETFs had reached $576.5 million. The analysts noted that the underwhelming results failed to reverse the declining trend of ether against bitcoin.
CME Traders Left Unsatisfied
Traders on CME anticipated a stronger debut for the ether futures ETFs but were disappointed by the outcome. Ether futures premiums had surged before the launch but quickly retraced after the lackluster performance. This situation mirrors what happened with bitcoin futures on CME in 2017, which took years to gain traction among institutional investors.
Optimism for Ether’s Long-Term Potential
Despite the initial disappointment, K33 Research remains optimistic about the long-term implications for ether. They believe that although there was no immediate liquidity, the situation may change quickly when market sentiment eventually turns. The launch of the ETFs has opened up new opportunities for ether.
Crypto Market Trends
Bitcoin and ether experienced a 5% increase in price over the past week, although they were up by nearly 10% before the ETF launches. BNB, the third-largest cryptocurrency by market cap, rose by 2% in the same period.
The market outlook is divided, with October expected to be a choppy month. Offshore below-neutral funding rates suggest a bearish sentiment among crypto futures traders, while options prices indicate a higher demand for calls over puts, leaning towards a bullish sentiment.
Hot Take: Ether Futures-Based ETFs Fall Short of Expectations
The launch of ether futures-based ETFs did not meet expectations, with low trading volume and assets under management compared to bitcoin futures ETFs. While this may be disappointing in the short term, there is still optimism for ether’s long-term potential. The market remains divided in its outlook, with mixed trends in bitcoin, ether, and other cryptocurrencies. It will be interesting to see how these developments shape the future of crypto investments.
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