BloFin believes spot Ethereum ETFs will drive short-term surge in ETH prices

BloFin, a cryptocurrency exchange, predicts that the introduction of spot Ethereum exchange-traded funds (ETFs) in the US will result in a short-term surge in Ethereum (ETH) prices. This comes as investors divert their attention from Bitcoin to the second largest cryptocurrency by market cap. According to BloFin’s research note shared with CryptoSlate on June 26, the exchange expects the launch of ETH ETFs to boost the price of Ethereum in the near future, based on various indicators such as options skewness, portfolio adjustments, and whale holdings. The US Securities and Exchange Commission (SEC) recently approved key filings for spot ETH ETFs, a decision that surprised many in the market. The ETH ETF applicants have been engaging with the regulator’s staff, and there are rumors that these financial products could begin trading as early as the first week of July. BloFin also noted a shift in bullish sentiment from Bitcoin to Ethereum, with short-term expectations for ETH being more optimistic than those for BTC. This change is attributed to the potential for higher returns from assets with lower market capitalization and higher volatility during an interest rate cut cycle. The analysts at BloFin anticipate that the approval of spot Ethereum ETFs will trigger an “asset allocation period” similar to Bitcoin’s experience in February and March, leading to a positive impact on ETH’s price. Furthermore, the forward exchange rate term structure of ETH/BTC suggests that investors believe ETH will outperform BTC in the coming months, leading to a short-term increase in the exchange rate. On-chain data also supports BloFin’s bullish outlook, as ETH whales have stopped selling their holdings, while BTC whales continue to reduce theirs. This may indicate a reallocation of portfolios by investors.