A Bitcoin analyst thinks spot Ethereum exchange-traded funds (ETFs) may have launched too early and could threaten Bitcoin’s price if no new capital enters the market.
“It would have been better to only have the BTC ETF in 2024,” Capriole Investments founder Charles Edwards told Cointelegraph. He argues that the new Ether ETFs will only distract investors who have been invested in Bitcoin.
“Current BTC ETF holders at the institutional level likely think they should diversify a little and buy the ETH ETF. Without new flows into the whole market, this creates sell pressure on Bitcoin,” Edwards argued.
Since spot Bitcoin ETFs launched on Jan. 11, approximately $17.53 billion has flowed into the 11 products, according to Farside Investors data.
Since Ether ETFs launched on July 23, Bitcoin’s dominance has remained fairly stable, up 0.07% over the past 24 hours, according to TradingView data.
While spot Bitcoin ETFs recorded net outflows of $78 million on July 23 — the debut trading day of spot Ether ETFs — the following two days have seen inflows of $44.5 million and $31.1 million, respectively.
Still, Edwards believes that “launching an ETH ETF into a somewhat weak market, or definitely not a strong one,” means there is uncertainty about capital allocation.
He also foresees “no strong catalysts in the near term for large price appreciation.”
At the time of publication, Ether’s price has dropped 9.2% since spot Ether ETFs launched on July 23, trading at $3,178, according to CoinMarketCap data.
Ether’s value has declined slightly more against Bitcoin, dipping 10.4% since July 18.
Futures traders do not anticipate a sudden recovery either, with $1.32 billion in short positions at risk if the price rebounds to $3,500, according to CoinGlass.
However, other crypto analysts agree with Edwards that this “could look very different in a few weeks.”
“As with Bitcoin, the start of trading of spot ETH ETFs seems to have been a sell-the-news event,” CryptoQuant head of research Julio Moreno wrote in a July 25 X post. Also similar to Bitcoin, analysts blame the Grayscale Ethereum Trust for the price decline.
“Once this massive amount of outflow stagnates or goes sub $100 million, the markets are reversing up,” MN Trading founder Michael van de Pope added.
“Ethereum is following the exact same trajectory as Bitcoin after the ETF was approved,” crypto commentator Croissant told their 116,600 X followers.
“The hype looks like it was priced in. One last sweep of the range lows prior to sending to price discovery is still the game plan from here,” crypto trader Kaleo added.
