ETH derivatives volume suggests that Ethereum investors have little confidence within the Spot Ethereum ETFs, sparking a large rally for the second-largest crypto token by market cap. This development comes amid the upcoming launch of those funds, that are expected to begin trading next week.
Ethereum Futures Premium Highlights Little Confidence In ETH’s Price
In accordance with data from Laevitas, Ethereum’s fixed-month contracts annualized premium currently stands at 11%, suggesting that crypto traders aren’t bullish enough on ETH’s price. Further data from Laevitas shows that this indicator has yet to sustain levels above 12% this past month.
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That is surprising considering that the Spot Ethereum ETFs, which could launch next week, are expected to spark a price surge for Ethereum. Crypto analysts like Linda have predicted that ETH could rise to as high as $4,000 due to the inflows these Spot Ethereum ETFs could witness.
Nevertheless, crypto traders usually are not convinced that Ethereum’s reaching such heights is more likely to occur, at the least not soon enough. A plausible explanation for this lack of excessive bullishness is that Ethereum’s price could proceed to trade sideways for some time, due to the $110 million each day outflows that research firm Kaiko projected could flow from Grayscale’s Spot Ethereum ETF.
Furthermore, this seems likely following the final S-1 filings by the Spot Ethereum ETF issuers, which showed that Grayscale has the very best fees. The asset manager plans to charge a management fee of two.50%, while the very best fee amongst other Spot Ethereum ETF issuers is 0.25%.
Grayscale had done something similar with its Spot Bitcoin ETF, setting its management fee at 1.5%, while the opposite Spot Bitcoin ETF issuers had management fees ranging between 0.19% and 0.39%. That move is believed to have been one among the the reason why Grayscale’s Bitcoin ETF witnessed significant outflows following the launch of the Spot Bitcoin ETFs.
Making A Case For Ethereum’s Inevitable Price Surge
Crypto analyst Leon Waidmann has made a bullish case for ETH’s price and explained why Ethereum investors must be more bullish. He noted that the discount between Grayscale’s Ethereum Trust (ETHE) and ETH’s price has significantly narrowed because the Spot Ethereum ETFs were approved earlier in May.
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Source: X
Waidmann stated that this has given ETHE investors ample time to exit their positions without significant discounts in comparison with Grayscale’s Bitcoin Trust (GBTC). One more reason GBTC is believed to have experienced such outflows was due to investors who were taking profits from having invested within the trust at a discounted price to Bitcoin’s spot price.
Nevertheless, unlike GBTC and other Spot Bitcoin ETFs, ETHE and other Spot Ethereum ETFs didn’t start trading immediately after approval. Due to this fact, Waidmann believes that whoever intended to make the most of the discount between ETHE and ETH’s price should have already done so before now. As such, Grayscale’s ETHE shouldn’t witness the identical amount of profit-taking as Grayscale’s GBTC did after it began trading.
ETH bulls hold price above $3,400 | Source: ETHUSDT on Tradingview.com
Featured image created with Dall.E, chart from Tradingview.com