Ether ETF speculation could put pressure on altcoins
The crypto bull run, which began last October, is known for seeing Ethereum's native token Ether (ETH) underperforming rival layer-1 cryptocurrencies such as SOL, BNB, and market leader Bitcoin (BTC).
This could change in the coming weeks, however, and with renewed hopes that a spot Ether exchange-traded fund (ETF) will be approved in the US, Ether could outperform others.
CoinDesk reported late Monday that the U.S. Securities and Exchange Commission (SEC) is asking firms looking to list and exchange Ether ETFs to update the documentation required to obtain regulatory approval. Bloomberg ETF analysts also raised the approval probability from 25% to 75%.
Ilan Solot, co-head of digital assets at Marex Solutions:
âETH has been a de facto funding token of this bull cycle, similar to the low-yielding Japanese yen in the foreign exchange market. With renewed hopes for a spot ETH ETF, investors will want to move ETH short positions into SOL and other tokens. This will allow Ether to outperform the overall market, at least in the short term.â
While approval is not guaranteed, signs of progress contrast with earlier this year when investors favored BTC, SOL and others over Ether.
Nearly a dozen spot Bitcoin ETFs began trading in January, placing the leading cryptocurrency at the forefront of mainstream institutional adoption. Additionally, in the first quarter, investors turned to cheaper and faster programmable blockchains like Solana, strengthening the bullish case for native tokens.
According to TradingView data, the SOL-ETH rate has increased by 287% since October, while the ETH-BTC rate has decreased by 16.6%.
