ETH Derivates Volume Have Flatlined Despite Spot Ethereum ETFs Approval, What’s Going On?
July 19 2024 - 3:00PM
NEWSBTC
ETH derivatives volume suggests that Ethereum investors have little
confidence in the Spot Ethereum ETFs, sparking a massive rally for
the second-largest crypto token by market cap. This development
comes amid the imminent launch of these funds, which are expected
to begin trading next week. Ethereum Futures Premium
Highlights Little Confidence In ETH’s Price According to data from
Laevitas, Ethereum’s fixed-month contracts annualized premium
currently stands at 11%, suggesting that crypto traders aren’t
bullish enough on ETH’s price. Further data from Laevitas shows
that this indicator has yet to sustain levels above 12% this past
month. Related Reading: Crypto Analyst Says Bitcoin Is Not
Ready For $65,000 Retest, But Can It Reach $71,500? This is
surprising considering that the Spot Ethereum ETFs, which could
launch next week, are expected to spark a price surge for Ethereum.
Crypto analysts like Linda have predicted that ETH could rise to as
high as $4,000 thanks to the inflows these Spot Ethereum ETFs could
witness. However, crypto traders are not convinced that
Ethereum’s reaching such heights is likely to happen, at least not
soon enough. A plausible explanation for this lack of excessive
bullishness is that Ethereum’s price could continue to trade
sideways for a while, thanks to the $110 million daily outflows
that research firm Kaiko projected could flow from Grayscale’s Spot
Ethereum ETF. Moreover, this seems likely following the final
S-1 filings by the Spot Ethereum ETF issuers, which showed that
Grayscale has the highest fees. The asset manager plans to charge a
management fee of 2.50%, while the highest fee among other Spot
Ethereum ETF issuers is 0.25%. Grayscale had done something similar
with its Spot Bitcoin ETF, setting its management fee at 1.5%,
while the other Spot Bitcoin ETF issuers had management fees
ranging between 0.19% and 0.39%. That move is believed to have been
one of the reasons why Grayscale’s Bitcoin ETF witnessed
significant outflows following the launch of the Spot Bitcoin
ETFs. Making A Case For Ethereum’s Inevitable Price Surge
Crypto analyst Leon Waidmann has made a bullish case for ETH’s
price and explained why Ethereum investors should be more bullish.
He noted that the discount between Grayscale’s Ethereum Trust
(ETHE) and ETH’s price has significantly narrowed since the Spot
Ethereum ETFs were approved earlier in May. Related Reading:
Why Did The German Government Sell Off 50,000 Bitcoin In 2 Weeks
Waidmann stated that this has given ETHE investors ample time to
exit their positions without significant discounts compared to
Grayscale’s Bitcoin Trust (GBTC). Another reason GBTC is believed
to have experienced such outflows was because of investors who were
taking profits from having invested in the trust at a discounted
price to Bitcoin’s spot price. However, unlike GBTC and other
Spot Bitcoin ETFs, ETHE and other Spot Ethereum ETFs didn’t start
trading immediately after approval. Therefore, Waidmann believes
that whoever intended to profit from the discount between ETHE and
ETH’s price must have already done so before now. As such,
Grayscale’s ETHE shouldn’t witness the same amount of profit-taking
as Grayscale’s GBTC did after it began trading. Featured
image created with Dall.E, chart from Tradingview.com
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