The recent launch of spot Ethereum exchange-traded funds (ETFs) has sparked concerns among some market analysts that it may have come too soon, potentially jeopardizing Bitcoin’s price.
Capriole Investments founder Charles Edwards believes that exclusive focus on Bitcoin ETFs in 2024 would have been more beneficial. He argues that the new Ether ETFs could divert investor attention away from Bitcoin, leading to sell-offs in the world’s largest cryptocurrency.
Since their launch on January 11, Bitcoin ETFs have attracted approximately $17.53 billion in investments. However, the subsequent debut of Ether ETFs on July 23 has raised questions about capital allocation. While Bitcoin ETFs experienced a brief outflow on the day of the Ether ETF launch, inflows have resumed in the following days.
Despite these initial inflows, Edwards maintains that launching an Ether ETF in a relatively weak market creates uncertainty. He predicts a lack of strong catalysts for significant price appreciation in the near term.
Ether’s price has indeed declined by 9.2% since the ETF’s launch, and its performance against Bitcoin has been even weaker. Futures markets also indicate a cautious outlook, with substantial short positions suggesting potential downside risks.
However, not all analysts share Edwards’ pessimistic view. Some believe that the initial sell-off is a typical “sell-the-news” event and expect a price recovery in the coming weeks. They point to the Grayscale Ethereum Trust as a major factor influencing the price decline and anticipate a reversal once the outflow from the trust slows down.
As the market digests the impact of Ether ETFs, the coming weeks will be crucial in determining whether Bitcoin’s dominance remains intact or if a shift in investor sentiment is underway.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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