Time to ‘pull the brakes’ on Ethereum and rotate back to Bitcoin: K33 report

The reasonably uninspired efficiency of 9 new Ethereum futures exchange traded funds (ETFs) has prompted experts at K33 Research to prompt a “rotate back” into Bitcoin (BTC). In an Oct. 3 market report, analysts Anders Helseth and Vetle Lunde said that its “time to pull the brakes on ETH and rotate back into BTC,” with the preliminary trading volume of Ether futures ETFs just accounting for 0.2% of what the ProShares Bitcoin Strategy ETF (BITO) generated on its very first day of trading in Oct. 2021. While the experts kept in mind that no one anticipated to see initial trading volume on the Ether futures ETFs “come anywhere close” to that of the Bitcoin futures ETFs– launched amid a raving bull market– the underwhelming first-day numbers “highly” missed expectations.Day one trading of ETH futures ETFs accounted for simply 0.2% of what BTC futures ETFs amassed in 2021. Source: K33 ResearchThis absence of institutional appetite for Ether ETFs caused Lunde to walk back on his previous guidance of increasing ETH allocation to best capitalize on the ETF hype. “The ETH futures ETF launch offers a crucial lesson for assessing the impact of simpler access to crypto investments for traditional financiers: increased institutional access will just create buying pressure if significant unsatiated need exists,” wrote Lunde. “This is not the case for ETH at the minute.” In the section of the report entitled “more chop ahead,” Lunde explained that the vast bulk of the crypto market does not have any significant short-term rate catalysts and will most likely advance its sideways trajectory for the foreseeable future. Related: Bitcoin bull market awaits as United States deals with bear steepener– Arthur HayesIn Lundes view, this landscape is only actually beneficial for Bitcoin, which has a possible spot for ETF approval to anticipate early next year, as well as the halving occasion which is presently on track for mid-April.” The gravitational pull in crypto for the time being stays in BTC, with an appealing occasion horizon down the line, still favoring aggressive accumulation.” Ben Laidler, worldwide markets strategist at eToro, charted a similar course ahead for crypto properties, albeit with a slightly more bearish sentiment.In emailed comments to Cointelegraph, Laidler pointed to current macro trends as a prospective down trigger for rates of essential crypto possessions like Bitcoin. “The Fed and oil rates have been regularly effective macro influencers on the crypto market in the previous number of years,” wrote Laidler. “At the late phase of the rate hike cycle were in, the market is searching for even more great news to push on, but with oil costs rising again, this could have a cooling impact on belief.” Magazine: Blockchain investigators– Mt. Gox collapse saw birth of Chainalysis

Other Questions People Ask

What does the K33 report suggest about the current state of Ethereum and Bitcoin?

The K33 report indicates that the recent launch of Ethereum futures ETFs has not generated significant institutional interest, leading analysts to recommend a "rotate back" into Bitcoin. The report highlights that the initial trading volume of Ether futures ETFs was only 0.2% of what Bitcoin futures ETFs achieved on their first day. This underperformance suggests a lack of demand for Ethereum compared to Bitcoin, prompting experts to advise caution regarding ETH investments.

Why did K33 Research recommend pulling back from Ethereum in favor of Bitcoin?

K33 Research's recommendation to pull back from Ethereum is based on the disappointing trading volumes of Ether futures ETFs, which fell significantly short of expectations. Analysts noted that the lack of institutional appetite for these ETFs indicates that there isn't sufficient demand for Ethereum at this time. In contrast, Bitcoin is seen as having better prospects due to potential ETF approvals and upcoming events like the halving, making it a more attractive investment option.

How do macroeconomic factors influence the K33 report's stance on Ethereum and Bitcoin?

The K33 report acknowledges that macroeconomic trends, such as Federal Reserve policies and oil prices, can significantly impact the crypto market. Analysts like Ben Laidler point out that these factors have historically influenced the prices of major cryptocurrencies, including Bitcoin. As the market navigates through a late-stage rate hike cycle, the report suggests that positive news will be crucial for driving sentiment, particularly for Bitcoin, while Ethereum may struggle in this environment.

What lessons can be learned from the performance of Ethereum futures ETFs according to the K33 report?

The performance of Ethereum futures ETFs serves as a critical lesson about the relationship between institutional access and market demand. K33 analysts emphasize that simply providing easier access to crypto investments does not guarantee buying pressure unless there is significant unsatisfied demand. This insight highlights the current challenges facing Ethereum and reinforces the notion that Bitcoin remains the favored asset in the current market landscape.

What future events could impact Bitcoin's performance according to the K33 report?

The K33 report points to several upcoming events that could positively influence Bitcoin's performance, including potential ETF approvals and the anticipated halving event scheduled for mid-April. These events are expected to create a favorable environment for Bitcoin accumulation, contrasting with the current stagnation in the broader crypto market. Analysts believe that these catalysts could attract renewed interest and investment in Bitcoin, reinforcing its position as a leading cryptocurrency.