eth derivatives volume suggests ethereum investors have little confidence in the ethereum-spot-etfs-trading/#:~:text=Bloomberg%20analyst%20James%20Seyffart%20has,approval%20would%20come%20this%20week.” rel=”nofollow”>ethereum Spot ETFwhich triggered a massive rally of the second-largest crypto token by market cap. This development comes amid the impending launch of these funds, which are expected to ethereum-etfs-to-launch-in-8-days/” rel=”nofollow”>We will start operating next week.
ethereum futures premium highlights low confidence in eth price
According eth” rel=”nofollow”>data From Laevitas, ethereum-outshines-bitcoin-in-investor-confidence/” rel=”nofollow”>ethereum Fixed Month Contracts The annualized premium currently stands at 11%, suggesting that crypto traders are not optimistic enough about the eth price. Other data from Laevitas shows that this indicator has yet to sustain levels above 12% over the past month.
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This is surprising considering that ethereum spot ETFs, which could launch as early as next week, are expected to cause the price of ethereum to surge. crypto analysts like Linda have predicted that eth could rise as high as $4000 on the back of inflows from these ethereum Spot ETF I could be a witness.
However, cryptocurrency traders are not convinced that ethereum will reach such heights, at least not soon enough. One plausible explanation for this lack of excessive optimism is that the ethereum price could continue to trade sideways for a while, thanks to $110 million in daily outflows that research firm Kaiko reported. projected Could flow from Grayscale's ethereum Spot ETF.
Furthermore, this seems likely after the ethereum-etf-issuers-unveil-management-fees/” rel=”nofollow”>Final S-1 Form Filings by spot ethereum ETF issuers, which showed that Grayscale has the highest fees. The asset manager plans to charge a 2.50% management fee, while the highest fee among other spot ethereum ETF issuers is 0.25%.
Grayscale had done something similar with its Spot bitcoin ETF, establishing its Management Commission by 1.5%, while other bitcoin Spot ETF issuers had management fees ranging from 0.19% to 0.39%. That move is believed to be one of the reasons why Grayscale’s bitcoin ETF witnessed significant outflows following the launch of the bitcoin Spot ETFs.
Arguments for the inevitable rise in the price of ethereum
ethereum-drained-exchanges-eigenlayer-eth-bulls/” rel=”nofollow”>Cryptocurrency analyst Leon Waidmann has x.com/LeonWaidmann/status/1814183363307348244″ rel=”nofollow”>made a bullish case for the eth price and explained why ethereum investors should be more optimistic. He noted that the discount between Grayscale's ethereum Trust (ETHE) and the eth price has narrowed significantly since ethereum-etfs/” rel=”nofollow”>ethereum Spot ETFs Approved Beginnings of May.
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Waidmann claimed that this has given ETHE investors enough time to exit their positions without significant discounts compared to bitcoin-etfs/” rel=”nofollow”>Grayscale bitcoin Trust (GBTC)Another reason GBTC is believed to have experienced such outflows was because investors were making profits from having invested in the trust at a price bitcoin-reaches-largest-discount-ever/” rel=”nofollow”>Discounted price at the bitcoin spot price.
However, unlike GBTC and other bitcoin spot ETFs, ETHE and other ethereum spot ETFs did not start trading immediately after their approval. Therefore, Waidmann believes that whoever intended to benefit from the discount between the price of ETHE and eth must have already done so earlier. As such, Grayscale’s ETHE should not witness the same amount of profit-taking that Grayscale’s GBTC did after it started trading.
Featured image created with Dall.E, chart from Tradingview.com
