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K33 Research analysts, in their recent publication, have called on investors to take action. Analyzing nine new Ethereum exchange-traded funds (ETFs), the analysts revealed that the trading volume in these funds is insignificant compared to Bitcoin ETFs and advised investors to switch from Ethereum to Bitcoin. They emphasized that due to the lack of institutional demand for Ethereum, Bitcoin is currently the preferred choice and that the crypto market may remain stagnant in the short term.
The Beginning of the End for Ethereum
A market report published on October 3rd revealed that the first-day trading volume of Ethereum futures ETFs accounted for only 0.2% of ProShares Bitcoin Strategy ETF. This significant difference in the market share prompted analysts to call for a return to Bitcoin.
The report, authored by Andres Helseth and Vetle Lunde, stated that a substantial trading volume was generated in Bitcoin futures ETFs due to the bull market in 2021. The analysts pointed out that no one expected such a volume in Ethereum ETFs during this period, yet they emphasized that the trading volume remains very low.
Bitcoin Should Be the Only Choice for Now
The lack of institutional demand in Ethereum ETFs led analyst Lunde to revise his previous recommendations for increasing ETH holdings to take full advantage of the ETF frenzy. The analyst explained this situation as follows:
“The launch of ETH futures ETF provides an important lesson to traditional investors evaluating the impact of easier access to crypto investments: increasing institutional access will create buying pressure only if there is significant unmet demand. However, this is not the case for ETH at the moment.”
In a section of the report, analysts expressed that the majority of altcoins traded in the cryptocurrency market lack short-term price catalysts and likely indicate that the market will remain sideways in the short term. According to Lunde, this situation creates a favorable environment for Bitcoin, which has the potential for ETF approval in early 2024 and highlights the upcoming halving event in April 2024:
“Currently, the attraction in the cryptocurrency market remains with BTC, and a promising event horizon supports aggressive accumulation.”
