Kaiko: Ethereum’s performance may surpass Bitcoin after the launch of spot ETF

Author: Vince Quill; CoinTelegraph; Compiler: Baishui, Golden Finance

According to Kaiko's latest report, Ethereum could outperform Bitcoin after the launch of the much-anticipated Ethereum exchange-traded fund (ETF) in the United States.

The report focuses on the Ethereum-to-Bitcoin price ratio, which measures the number of BTC required to buy 1 ETH. The higher the indicator, the higher the price of Ethereum relative to Bitcoin, and vice versa.

The ratio is currently 0.05, while the ratio was 0.045 before the U.S. Securities and Exchange Commission (SEC) approved the spot Ethereum ETF.

ETH to BTC price ratio. Source: Kaiko

The report also pointed out that 1% of Ethereum's market depth could be a potential catalyst for the upcoming ETH bull run. Market depth measures market liquidity. The lower the liquidity of an asset, the greater the volatility, while the higher the liquidity, the more stable the market price will be in the face of large orders.

The low market depth is supported by Ethereum exchange reserves, which track the amount of Ethereum available for purchase on exchanges, which are currently at multi-year lows, and could signal an impending supply shock driven by institutional demand to fill their Ethereum ETFs, which could lead to a significant price increase.

Ethereum ETF Coming Soon

All eyes are on the launch of a spot Ethereum ETF, which analysts say could happen soon. Eric Balchunas, senior ETF analyst at Bloomberg, continues to predict a July launch for the product. According to Balchunas, the SEC requires applicants to submit an amended S-1 form by July 16 in order to launch the product by July 23.

Institutional investor Tom Dunleavy recently noted that he believes an Ethereum ETF will see inflows of $10 billion at a rate of about $1 billion per month.

Regulatory Controversy

Regulatory circles have been hotly debated over whether Ethereum is a commodity or a security. According to Conensys attorney Laura Brookover, In June, the SEC dropped its investigation into the smart contract protocol, presumably to avoid embarrassment.

Recently, Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam argued that ETH is a commodity and falls under the agency’s jurisdiction.