Analysts Advise Investors to Reevaluate Their Strategy and Return to Bitcoin Investments, Leaving Ethereum Behind
Date: 2023-10-05 Author: Dima Zakharov Categories: CRYPTO PAYMENTS
Unsatisfactory Trading Volume of Ethereum Futures ETFs
The cryptocurrency world has always been at the forefront of investors' and traders' attention, and in recent years, Ethereum (ETH) has become one of the most discussed assets. However, recent reports and analyses presented by K33 Research raise questions about how sustainable the interest in this second-largest cryptocurrency by market capitalization really is.
In their recent report, analysts Anders Helseth and Vetle Lunde highlighted the unsatisfactory trading volume figures of Ethereum futures ETFs. At first glance, the launch of futures ETFs on ETH could have been a great opportunity for investors and traders to increase their positions in this cryptocurrency. However, the reality turned out to be less rosy.
Trading Volumes and Institutional Interest
The first day of trading for Ethereum futures ETFs did not prove to be very successful. The total trading volume on this market amounted to only 0.2% of the trading volume of the ETF Bitcoin Strategy (BITO), which was launched in October 2021. This fact has raised some concerns, considering that Ethereum has long been considered an attractive alternative to Bitcoin.
Investors had expected more interest in Ethereum ETFs, especially given the growing popularity of cryptocurrencies and institutional players' desire to increase their investments in this asset. However, even after the launch of Ethereum ETFs, institutional interest proved to be insufficient.
Revising Recommendations
Unsatisfactory trading figures and a lack of interest from institutional investors have led to a revision of recommendations. Vetle Lunde, one of the analysts at K33 Research, has decided to change his recommendations regarding Ethereum. Previously, he might have recommended investments in ETH, but now he is urging investors to return to Bitcoin.
Interestingly, right after the launch of Ethereum funds, the price of this cryptocurrency rose by 5%. However, this growth quickly faded, and the price even started to decline. This indicates the instability and uncertainty currently prevalent in the Ethereum market.
Lesson for Investors
The launch of Ethereum futures ETFs has taught us an important lesson. It has shown that expanding access to cryptocurrency investments for traditional investors does not always lead to asset growth. This only happens when there is significant unmet demand.
Now we see that the demand for Ethereum is not as great as expected. Investors who were counting on ETH's price rising after the ETF launch have been disappointed. This underscores the importance of caution and thorough market analysis before making investment decisions.
