Ether Seen Outperforming Bitcoin After ETF Debut, Kaiko Says

(Bloomberg) — The upcoming launch of spot Ether exchange-traded funds may propel the cryptocurrency to keep outperforming bigger rival Bitcoin, research firm Kaiko said.

Kaiko cited the price of Ether relative to Bitcoin increasing to around 0.05 from 0.045 following the first stage of approval for Ether ETFs from the US Securities and Exchange Commission.

The Ether to Bitcoin ratio measures how much Bitcoin is needed to purchase a single Ether token. A higher ratio is better for Ether because it means that the value of the token is higher relative to Bitcoin.

In the time since the SEC paved the way for the ETF approval on May 23, the price of Ether has fallen about 10% to $3,380. But Kaiko says that this doesn’t tell the whole story, and the increased ratio bodes well for the cryptocurrency’s performance after the ETFs begins trading.

Final approval from the SEC is expected to come around mid-July, Steve Kurz, head of asset management at Galaxy Digital, estimated at the start of the month.

Following the launch of Bitcoin ETFs, the price of the cryptocurrency has jumped around 50% this year to $63,400. Ether is up 48% this year.

Matthew O’Neill, co-director of research at Financial Technology Partners, says the launch of an Ether ETF would allow institutional investors to diversify their crypto portfolio away from solely Bitcoin products, and that they would likely own a mix of both.

“They would be able to pick from two flavors on the menu rather than just one,” said O’Neill.

The potential approval of the ETFs has not been fully priced into the market and some investors are still waiting on the sidelines until the day they trade, O’Neill added. Because of this, he says the price of Ether still has room to rise.

At a market value of about $400 billion, Ether is the second-largest cryptocurrency after Bitcoin, which has a market value of around $1.2 trillion.

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