Analysts claim Ethereum to surpass Bitcoin as the spotlight shifts to ETH ETF narrative
QCP Capital analysts have observed that despite Bitcoin’s sudden drop to $59,000, funding rates have returned to reasonable levels and they believe that the ETH/BTC pair will outperform.
In a volatile overnight session, Bitcoin quickly reached a new all-time high of $69,400 but then experienced a rapid decline, dropping to $59,200 within a few hours. This significant downturn led to over $1 billion in leveraged long positions being liquidated on Binance alone.
However, QCP Capital analysts point out that the market quickly rebounded as buyers aggressively bought the dip, with the $60,000 level showing strong support. Funding rates have now returned to sensible levels, around 30% annually on Binance. With this in mind, QCP Capital analysts expect Ethereum to outperform Bitcoin, especially as the narrative around a spot Ethereum exchange-traded fund (ETF) gains traction.
Despite the unwinding of leverage, term futures are still trading at a significant premium to spot prices. Analysts highlight a surge in client activity aimed at selling the spot-forward spread, particularly for contracts expiring between September and December this year. This allows investors to secure risk-free yields for the year.
At present, Ethereum is still far from its all-time high compared to Bitcoin, suggesting the potential for rapid value appreciation. While Bitcoin is only 4.3% away from its historical peak reached on March 5, Ethereum is lagging behind its 2021 record by over 20%, according to CoinGecko data.
As the cryptocurrency landscape continues to evolve, major Wall Street players are intensifying their efforts to introduce more spot crypto ETFs. This follows the US Securities and Exchange Commission’s (SEC) approval of all applications for spot Bitcoin ETFs earlier this year. Reports indicate ongoing discussions between the SEC and Ethereum ETF applicants, with decisions on spot Ethereum ETFs postponed until at least May. VanEck’s filing, in particular, is awaiting a response by May 23, along with applications from BlackRock, Franklin Templeton Grayscale, and Invesco Galaxy.
