In a recent market update, quantitative trading firm QCP Capital has set the stage for Ethereum (ETH) to shine, projecting sustained outperformance against its formidable counterpart, Bitcoin (BTC), in the coming months. The focal point of this positive forecast revolves around the eagerly anticipated approval of spot Ethereum Exchange-Traded Funds (ETFs), adding fuel to Ethereum’s market momentum.
Ethereum’s Rally in Response to Bitcoin ETF Approval
Following the green light given to multiple spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC), Ethereum witnessed an impressive surge of over 5% within a week. In stark contrast, Bitcoin experienced a decline of over 6% during the same period. QCP Capital’s analysis sheds light on a significant shift in the ETH/BTC exchange rate, rising from 0.05 to 0.06 in the past week.
The market update report underlines the positive trends for Ethereum, even in the face of slightly reduced yields. Ethereum’s 1-month forwards, boasting annualized yields of 11–13%, continue to present an attractive investment opportunity. Moreover, the strategy of selling ETH 1-month 2200 Puts is considered prudent, offering yields exceeding 21% annually, especially if there’s a market dip following potential Ethereum spot ETF approvals.
Circulating Supply Profit and Current Prices
Recent data reveals a notable movement in the percentage of circulating supply profit for both Ethereum and Bitcoin. Ethereum’s circulating supply in profit has reached a multi-year high of 91.8%, while Bitcoin’s percentage of supply in profit has fallen to 86.2%. Currently, ETH is trading at $2,535, experiencing a marginal 0.3% decrease in the past day. Similarly, Bitcoin is down by 0.02%, trading at $42,710.
QCP Capital also highlights upcoming events that may shape the crypto market trajectory. The Bitcoin halving in mid-April and potential Ethereum spot ETF approvals starting in May are anticipated to play pivotal roles. Macro-economic factors, including the January Federal Open Market Committee (FOMC) meeting and the February Non-Farm Payrolls (NFP) and Consumer Price Index (CPI) prints, are closely monitored by crypto enthusiasts for potential impacts.
Larry Fink’s Endorsement and Divergent Opinions on SEC Approval
The momentum behind the idea of an Ethereum spot ETF gained traction after BlackRock CEO Larry Fink expressed his optimism about the product’s value for the U.S. market. Fink’s endorsement followed the successful launch of BlackRock’s spot Bitcoin ETF. Notably, BlackRock filed with the SEC for a spot Ethereum ETF in November, signaling the increasing institutional interest in Ethereum as a viable investment option.
Eric Balchunas from Bloomberg anticipates SEC approval for an Ethereum spot ETF, building on the success of the Bitcoin ETF approval on January 10. However, opinions on the SEC’s stance diverge. SkyBridge Capital’s Anthony Scaramucci sees SEC Chairman Gary Gensler as a potential obstacle, suggesting that approval may be less likely under his leadership. Crypto lawyer Joe Carlasare acknowledges the eventual approval of Ethereum spot ETFs but suggests that the SEC may seek to retain discretion in determining which digital asset ETFs are permitted.
Anticipated Market Influences and the Road Ahead
As Ethereum gears up for potential outperformance against Bitcoin, market observers are closely monitoring the confluence of events. The Bitcoin halving and Ethereum spot ETF approvals are expected to create ripples, but macroeconomic factors, such as the FOMC meeting and key economic prints, may also exert their influence.
Investors and enthusiasts are advised to stay attuned to these developments, recognizing the evolving landscape of the crypto market. Ethereum’s upward trajectory, fueled by institutional interest and market dynamics, positions it as a key player in the unfolding narrative of the digital asset space. The future holds promise, and Ethereum’s potential surge could mark a defining moment in the broader crypto landscape.
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