Market Sentiment Shifts Towards Bitcoin

Options traders are now anticipating more significant price movements for bitcoin compared to ether, reflecting a potential short-term market sentiment shift favoring the former.

Ethereum ETFs Launch Fails to Surge

After the eagerly awaited trading of Ethereum spot exchange-traded funds (ETFs) began on Tuesday, the anticipated market surge did not occur. In the past 24 hours, Ethereum (ETH) has declined by 1.4%, now trading at $3,455 according to The Block’s Price Page.

QCP Capital analysts noted that bitcoin options possess higher implied volatility than ether options, indicating stronger short-term price movement expected for BTC. They also observed that Ethereum’s volatility sold off, and the premium of ether to bitcoin vols has reversed, with bitcoin’s 1-week and 2-week options trading at 1 to 3 points higher than ether.

Underperformance of Ethereum ETFs

The newly launched spot Ethereum ETFs witnessed net inflows exceeding $107 million on their first day of trading, significantly underperforming compared to the $655 million of net inflows seen on the first day of bitcoin ETFs. A contributing factor to lower capital flows into Ethereum ETFs was the $484 million outflow from Grayscale’s converted Grayscale Ethereum Trust (ETHE) during day one.

Nevertheless, QCP Capital analysts remain optimistic about ether in the medium to long term. They pointed to bitcoin’s all-time high achieved two months post-ETF launch as a promising precedent, suggesting Ethereum’s price trajectory may gradually align with its previous peak.

Future Outlook for Ethereum ETFs

BRN analyst Valentin Fournier indicated that positive Ethereum ETF activity in the medium to long term could mitigate the post-launch sell-off and drive prices higher. He added, “If spot Ethereum ETF activity continues positively in the coming days, Ethereum might recover from the post-launch decline and aim for higher levels.”

Despite this, he expects bitcoin to outperform ether in the near term due to increased crypto activity and lessened impact of the Ethereum ETF launch sell-off on bitcoin.