K33 Report Advises Shifting Focus from Ethereum to Bitcoin
The underwhelming performance of nine new Ethereum (ETH) futures exchange-traded funds (ETFs), which collectively saw minimal initial trading volume, has prompted analysts at K33 Research to recommend a shift in focus back to Bitcoin (BTC).
In their market report dated October 3rd, analysts Anders Helseth and Vetle Lunde suggested that it's "time to pull the brakes on ETH and rotate back into BTC." The report highlighted that the initial trading volume of Ether futures ETFs accounted for only 0.2% of what the ProShares Bitcoin Strategy ETF (BITO) amassed on its first day of trading in October 2021.
While it was acknowledged that expectations for the Ether futures ETFs' initial trading volume were not set as high as those for Bitcoin futures ETFs launched during a bullish market, the report noted that the underwhelming numbers "strongly" missed expectations.
The lack of institutional interest in Ether ETFs has led Vetle Lunde to revise his earlier advice regarding increasing ETH allocation to capitalize on the ETF hype. Lunde explained that this situation serves as an important lesson for evaluating the impact of increased traditional investor access to crypto investments, emphasizing that buying pressure will only materialize if there is substantial unsatiated demand, which does not currently exist for Ether.
In a section titled "More chop ahead," Lunde expressed the view that the majority of the crypto market lacks significant short-term price catalysts and is likely to continue moving sideways for the foreseeable future. Lunde believes that this environment is more favorable for Bitcoin, which has the potential for ETF approval in the near future and a halving event expected around mid-April, providing reasons for aggressive accumulation.
While the K33 report leans towards a positive outlook for Bitcoin, Ben Laidler, global markets strategist at eToro, offered a slightly more bearish perspective. Laidler highlighted macro trends as potential downward triggers for major cryptocurrencies like Bitcoin, pointing to the influence of the Federal Reserve's policies and oil prices on the crypto market. As the late stage of the rate hike cycle unfolds and oil prices rise, market sentiment could be affected.
The K33 report suggests a shift in focus from Ethereum to Bitcoin due to the lackluster performance of Ether futures ETFs, while also highlighting potential macroeconomic factors that could influence the crypto market's direction in the coming months.