Is Market Ready For Ethereum ETF? Approval Uncertainty Keeps Traders Bullish On Bitcoin, Says Report
By Benzinga
Despite predictions of a potential surge in Ethereum (CRYPTO: ETH) value, traders still favor Bitcoin (BTC) over ETH. This trend is influenced by the uncertainty surrounding the U.S. Securities and Exchange Commission (SEC) approval of ETH-based exchange-traded funds (ETFs).
What Happened: A report by CoinDesk on Friday highlighted that traders are showing a preference for Bitcoin despite bullish predictions for Ethereum. This was observed through the ETH/BTC forward term structure, indicating a potential Ether-Bitcoin ratio decline in the coming months.
The report also mentions that the ETH/BTC ratio experienced a 17% surge shortly after the SEC approved spot Bitcoin ETFs. However, it has since dropped, possibly due to concerns about the SEC’s classification of Ethereum as a security or commodity.
“The downward sloping structure is backward, which means that traders expect ETH to perform weaker than BTC as time goes by,” said Griffin Ardern, a crypto trader.
Singapore-based QCP Capital mentioned in their recent note, “There is a lot of uncertainty around the ETH spot ETF, mainly because its Proof-of-Stake could place it in a different asset classification from BTC. Greater uncertainty could also mean greater volatility.”
Why It Matters: The ongoing preference for Bitcoin over Ethereum is interesting in light of recent developments in the crypto market. Just a week ago, Standard Chartered predicted a potential surge in ETH value to $4,000 in the next three months, driven by the possible approval of spot ETFs tied to ETH by the SEC.
Earlier in January, the SEC postponed its decision on approving Grayscale’s ETH-based ETF proposal, adding to the uncertainty surrounding ETH’s regulatory status. Despite these developments, the market seems to be leaning more towards Bitcoin.
This ongoing trend may reflect the market’s skepticism about the potential approval of ETH-based ETFs. If the SEC continues to delay its decision, it could further reinforce Bitcoin’s position as the preferred cryptocurrency for traders.
Photo Courtesy: alfernec on Shutterstock.com
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