As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous trends come and go. However, the recent shift towards Ethereum exchange-traded funds (ETFs) over Bitcoin ETFs is particularly intriguing.
Since last Friday, November 22nd, investors have funneled more funds into Ether exchange-traded funds (ETFs) compared to Bitcoin ETFs. This shift can be attributed to Ethereum’s decentralized finance (DeFi) ecosystem securing a significant legal victory this week.
Over the past four trading days from November 22nd to 27th, Ether ETFs accumulated a total of $224.9 million in net inflows, whereas Bitcoin ETFs saw $35.2 million in net inflows during the same period, according to data from Farside Investors.
It follows a nearly 8% Ether (ETH) price rally to over $3,590 over the past seven days.
One industry executive has attributed the price gain to Ethereum-based Tornado Cash’s recent court victory, along with reports that crypto advocate Paul Atkins could replace Gary Gensler and lead a more crypto-friendly Securities and Exchange Commission.
If the trading on November 29th turns out favorably, it might mark the first week where U.S. Ether funds surpass spot Bitcoin ETFs in terms of total incoming investments.
ETH to BTC price ratio rises
Over the past seven days, Ethereum has increased 7.7% to $3,590 while Bitcoin (BTC) has fallen 2% to $96,780 — bringing the ETH to BTC price ratio back up to 0.037 BTC.
But despite the recent slowdown, spot Bitcoin ETFs have still had a record-breaking month with more than $6.2 billion of net inflows in November — which includes an eye-popping $3.1 billion in inflows last week.
10x Research’s founder, Markus Thielen, proposes that Tornado Cash’s partial court victory in the U.S. may have played a role in the surge of Ethereum’s price. This is because Ethereum serves as the main hub for decentralized finance (DeFi), and Tornado Cash is a significant player within this ecosystem.
According to Thielen’s explanation, the possibility of Paul Atkins becoming the new SEC Chair could potentially be advantageous for Ethereum.
“This underperformance was previously justified before the U.S. Presidential election, but with expectations of a more favorable regulatory environment, it now presents a potential opportunity.”
According to Thielen, it would be advantageous for President-Elect Donald Trump and his sons, given their participation in the decentralized finance (DeFi) platform, World Liberty Financial, to have a stronger decentralized financial ecosystem.
“[This] sends a strong signal of a potential DeFi renaissance under a Trump presidency.”
In essence, Ethereum can be seen as a “latecomer’s opportunity” because it has not kept pace with Bitcoin and Solana (SOL) during the current bull market, according to Thielen.
Since Trump’s election win, there has been a significant 160% increase in the demand for Ether ETFs that are based on spot trading, as mentioned by K33 Research on November 28.
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2024-11-29 08:03