Ethereum Continues to Trail Behind Bitcoin

Despite its prominence in the cryptocurrency world, Ethereum finds itself playing second fiddle to Bitcoin once again. Traders are flocking to Bitcoin, attracted by the allure of higher futures premiums, all while anticipating the approval of spot ETFs. K33 Research has delved into this intriguing development.

The absence of fervor surrounding the launch of Ethereum futures ETFs has resulted in a decline in the ETH/BTC ratio to 0.057, a 14-month low. Meanwhile, Bitcoin's dominance level has approached two-year highs.

Analysts suggest that the disparity in premium sizes between assets may be due to Bitcoin's potential for the imminent arrival of spot ETFs, making it more appealing than Ethereum, which is intertwined with DeFi and NFTs. Preferring digital gold until there are clear signs of "sparks" in the second-largest cryptocurrency by market capitalization is likely the safest strategy at the moment, they noted.

Analysts also pointed out that they do not expect the SEC to appeal the decision on Grayscale's lawsuit by the October 13 deadline. In this case, the court is likely to instruct the regulator to reconsider the company's application to convert GBTC into a spot Bitcoin ETF.

Experts are confident that developments surrounding Grayscale could lead to a significant market reaction in the short term. Afterward, attention will shift to the upcoming deadlines for spot Bitcoin ETF applications from BlackRock, Fidelity, VanEck, and Invesco.

Specialists have noted growing optimism in the derivatives market. Specifically, premiums on CME for the next month and financing rates have increased. The rise in volatility skew in six-month Bitcoin options suggests sustained demand for calls. However, overall sentiments have been characterized as cautious.

The five-day volatility of Bitcoin futures reached 9.4%, the second-highest figure in 2023. This was accompanied by changes in CME premiums. Increased activity did not lead to any significant directional impulses, according to experts.

One week ago, K33 Research recommended that investors redirect capital from the second-largest cryptocurrency by market capitalization to the first.

It's worth recalling that Standard Chartered analyst Jeffrey Kendrick has predicted Ethereum reaching $8,000 by the end of 2026.

Former BlackRock director Steven Schoenfeld has speculated that the SEC will approve the instrument within three to six months.