ETH derivatives volume suggests Ethereum investors have little confidence in Spot ETFs Ethereumtriggering a massive rally for the second-largest crypto token by market capitalization. This development comes amid the impending launch of these funds, which are start trading next week.
Ethereum Futures Premium Highlights Low Confidence in ETH Price
According to data from Laevitas, Monthly Fixed Value Ethereum Contracts The annual premium currently stands at 11%, suggesting that crypto investors are not sufficiently bullish about the ETH price. Further data from Laevitas shows that the indicator has yet to sustain levels above 12% over the past month.
This is surprising, considering that the Spot Ethereum ETF, which could launch next week, is likely to trigger a rally in Ethereum prices. Cryptocurrency analysts like Linda have predicted that ETH could rise as high as $4,000 thanks to inflows of these Spot ETFs Ethereum could be a witness.
However, cryptocurrency investors are not convinced that Ethereum will reach such highs, at least not soon enough. A likely explanation for this lack of overoptimism is that Ethereum’s price may move sideways for a while, thanks to the $110 million in daily outflows that research firm Kaiko designed may flow from Grayscale’s Spot Ethereum ETF.
Moreover, it seems likely after final S-1 filings by Spot Ethereum ETF issuers, which showed Grayscale has the highest fees. The asset manager plans to charge a management fee of 2.50%, while the highest fee among other Spot Ethereum ETF issuers is 0.25%.
Grayscale did something similar with its Spot Bitcoin ETF, fixing its Management fee at 1.5%, while other Spot Bitcoin ETF issuers charged management fees ranging from 0.19% to 0.39%. This move is believed to be one reason why Grayscale’s Bitcoin ETF saw significant outflows following the launch of the Spot Bitcoin ETF.
Making the case for Ethereum’s inevitable price boost
Cryptocurrency Analyst Leon Waidmann has made bullish case for ETH price and explained why Ethereum investors should be more bullish. He noted that the discount between Grayscale’s Ethereum Trust (ETHE) and ETH price has narrowed significantly since Spot Ethereum ETF Approved earlier in May.
Waidmann said this gave ETHE investors enough time to exit their positions without significant discounts compared to Bitcoin Trust (GBTC) by GrayscaleAnother reason why GBTC experienced such outflows is believed to be due to investors who were profiting from their investment in the mutual fund reduced price to the Bitcoin spot price.
However, unlike GBTC and other Spot Bitcoin ETFs, ETHE and other Spot Ethereum ETFs did not begin trading immediately after approval. Therefore, Waidmann believes that anyone who intended to take advantage of the discount between the price of ETHE and ETH must have done so already. As such, Grayscale’s ETHE should not experience the same level of profit-taking as Grayscale’s GBTC after trading began.
Featured image created with Dall.E, chart from Tradingview.com
