The recent surge in Ethereum derivatives volume suggests that investors have little confidence in the Spot Ethereum ETFs, despite the imminent launch of these funds. Data from Laevitas reveals an annualized premium of 11% on Ethereum’s fixed-month contracts, indicating a lack of bullish sentiment towards ETH’s price. This lack of confidence is further highlighted by the failure of the premium to sustain levels above 12% in the past month.
Price Surge Speculation
Although analysts like Linda have predicted a potential price surge for Ethereum, with some estimates reaching as high as $4,000, traders are skeptical about the likelihood of such a rally. The anticipated $110 million daily outflows from Grayscale’s Spot Ethereum ETF could contribute to Ethereum’s sideways trading pattern in the near future. The higher fees charged by Grayscale compared to other ETF issuers also raise concerns among investors.
Bullish Case for Ethereum
Crypto analyst Leon Waidmann has presented a bullish case for Ethereum, pointing out the narrowing discount between Grayscale’s Ethereum Trust (ETHE) and ETH’s price following the approval of Spot Ethereum ETFs in May. This narrowing discount provides investors with an opportunity to exit their positions without significant losses, unlike what was observed with Grayscale’s Bitcoin Trust (GBTC). Waidmann believes that investors who intended to profit from the discount have likely already done so, given the delayed trading start for ETHE and other Spot Ethereum ETFs.
The lack of confidence in Ethereum ETFs reflects the current bearish sentiment prevailing among investors. Despite the speculation of a potential price surge with the launch of Spot Ethereum ETFs, traders remain cautious about Ethereum’s immediate future. The discrepancies in fees charged by different ETF issuers, along with the anticipated outflows from Grayscale, contribute to the overall uncertainty surrounding Ethereum’s price trajectory. Investors should carefully assess these factors before making any significant investment decisions in the Ethereum market.