Why Ether and not Bitcoin is the most successful crypto trade so far in 2024 (Crypto:ETH-USD)

Liliya Filakhtova

It has been less than a week since the US Securities and Exchange Commission gave the green light to the country's first spot Bitcoin exchange funds. This marks a major milestone that is expected to attract more investors to the 15-year-old cryptocurrency. Since then, Bitcoins (BTC-USD) Price action was disappointing, falling to $43.3K on Friday afternoon from around $46K at the time of approval.

Instead, investors appear to have focused on Ether (ETH-USD), the second-largest cryptocurrency, as the token's price has risen since 11 Bitcoin ETFs were released. Since the start of 2024, ETH is up 14.4% while Bitcoin (BTC-USD) is up 3.7%, as seen in this chart.

Market participants may be betting that ETFs that invest directly in Ether (ETH-USD) will be next to receive SEC approval. Bitcoin (BTC-USD) has been on the rise for months in anticipation of the launch of ETFs holding the token, rising more than 160% over the past year. However, BTC's weakness since approval suggests that the months-long rise may soon be coming to a halt, at least for now.

“Now that the Bitcoin ETF is officially live, the public image and trust in Bitcoin is shifting towards a positive image,” said Nathan Leung, senior content creator at Cryptonauts. “This will attract new investors and increase awareness. However, the hype is only temporary… and it is safe to assume that an Ethereum ETF will be designed for another hype cycle.”

BlackRock (BLK) CEO Larry Fink sees “the value in having an Ethereum ETF,” he said in an interview with CNBC on Friday, a day after launching Bitcoin ETFs. “These are just stepping stones toward tokenization, and I really believe that’s where we’re going.”

Fink is not just talk. The asset manager's iShares unit filed with the SEC to register a spot Ether ETF (ETH-USD). As if that wasn't enough, BlackRock's (BLK) iShares Bitcoin Trust (IBIT) was one of the Bitcoin ETFs that debuted in the US on Thursday. The product has already captured about $1 billion of the ETFs' total trading volume of $4.6 billion.

Other companies applying for Ether ETF approval include: Grayscale, Invesco (IVZ), VanEck and Ark.

Increasing optimism about Bitcoin ETFs (BTC-USD) caused Ether (ETH-USD) to underperform its rival in 2023, with BTC gaining 165.1% while ETH gained 93.8%. Now the tide seems to be turning.

Aaron Rafferty, CEO of technology firm StandardDAO, expects Ether (ETH-USD) to experience a similar uptrend to BTC ahead of a possible ETF approval. “If ETH is next, one can certainly expect a similar surge leading up to the event,” he said.

Some believe that approving an Ether ETF (ETH-USD) will be a more difficult task as SEC Chairman Gary Gensler considers all crypto assets except Bitcoin to be securities and therefore subject to securities regulations. Bitcoin (BTC-USD) is classified as a commodity by the SEC.

“The SEC has a number of applications for ETH spot ETFs and we should receive a response in May of this year, and if they are rejected, I expect these applicants to continue to address the SEC's concerns and do it again “try,” said Chris Broderson, managing director at EisnerAmper.

Should approval for such a product come about, it would further legitimize crypto as an asset class, he added, “as investors invest in the asset, not the underlying technology.” This could also pave the way for other cryptocurrencies or cryptocurrency baskets be packaged into an ETF.”

More about Bitcoin and Ethereum

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers