A Bitcoin analyst suggests that the introduction of spot Ethereum exchange-traded funds (ETFs) may have been premature and could negatively impact Bitcoin’s price if no new capital enters the market.
Charles Edwards, founder of Capriole Investments, told Cointelegraph, “It would have been better to only have the BTC ETF in 2024.”
He believes the launch of Ether ETFs might divert investor attention from Bitcoin.
Edwards points out that institutional investors holding Bitcoin ETFs may feel compelled to diversify by purchasing Ether ETFs.
“Current BTC ETF holders at the institutional level likely think they should diversify a little and buy the ETH ETF. Without new flows into the whole market, this creates sell pressure on Bitcoin,” he explained.
Since the debut of spot Bitcoin ETFs on January 11, approximately $17.53 billion has flowed into 11 different products, according to Farside Investors.
Meanwhile, Bitcoin’s market dominance has stayed relatively steady, increasing by 0.07% over the past 24 hours, based on TradingView data.
The launch of Ether ETFs on July 23 coincided with a net outflow of $78 million from spot Bitcoin ETFs, though the subsequent two days saw inflows of $44.5 million and $31.1 million.
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Edwards remains cautious, stating that the Ether ETF launch in a “somewhat weak market” has led to uncertainty regarding capital allocation.
He foresees “no strong catalysts in the near term for large price appreciation.”
As of the publication, Ether’s price has dropped 9.2% since the launch, trading at $3,178, while its value against Bitcoin has declined by 10.4%.
Futures traders are not expecting a quick recovery, with $1.32 billion in short positions at risk if Ether’s price rises to $3,500, according to CoinGlass.
Some analysts, however, believe this situation could change soon.
Julio Moreno from CryptoQuant commented that the start of trading for spot ETH ETFs appears to have been a “sell-the-news event,” and similar market reactions were observed with Bitcoin.
Michael van de Pope from MN Trading and crypto commentator Croissant also noted that Ethereum’s trajectory mirrors Bitcoin’s post-ETF approval, suggesting a potential market reversal once outflows stabilize.
Crypto trader Kaleo mentioned the possibility of one final dip before a significant price increase.
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