Crypto analytics firm Kaiko says speculative interest in Ethereum (ETH) has not yet erupted, despite the price already being well above its 2022 low.
In a new reportKaiko says Bitcoin has benefited from the hype surrounding the approval of BTC exchange-traded funds (ETFs) in the US, but speculation about an Ethereum ETF has not yet begun.
The US Securities and Exchange Commission (SEC) recently decided to postpone its decision on banking giant Fidelity’s Ethereum ETF application until March.
Says Kaiko,
“While there is some hype around ETH ETF applications, the data suggests that aggressive speculation has not yet begun. ETH trading volume has risen, but derivatives markets lacked the telltale signs that traders were positioning for a rally. ETH futures ETFs have also had a quiet few months of trading.
The correlation between ETH and BTC has sunk to a multi-year low as each asset matures and develops its own stories. While ETFs have been one of the most catalytic stories in BTC history, it remains to be seen whether ETH will be able to replicate this. However, ETH has many stories to lean on; If ETFs don’t stoke enthusiasm, perhaps new Layer-2s or the success of EigenLayer and its resumption will.”
Kaiko says derivatives data also indicates that recent ETH moves have been largely driven by spot markets rather than perpetual futures, which the company says provides evidence that traders are not using leverage in anticipation of an ETH ETF.
“September and October marked a trough in the futures markets, with aggregate open interest (in USD) falling more than 20% from summer levels. At that time there was little price movement and financing rates were neutral…
Following BTC’s approval, funding rates have reset to neutral, while open interest has risen faster than the price, indicating increased short positions. Yet we have not yet seen a large increase in open interest that is typical of a bull market.”
At the time of writing, ETH is trading at $2,473.
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