Is Bitcoin Crowding Out Ethereum? High Risk Could Mean High Returns
According to research by global investment firm QCP, Ethereum (ETH) is losing ground against Bitcoin (BTC).
The Bitcoin price is closing the week above $60,000 with investments flowing into the market after a sharp decline at the beginning of the week.
“While BTC is increasingly integrated into mainstream macro capital markets, ETH appears to be increasingly crowding out,” QCP analysts said. The difference in growth rates between spot Bitcoin ETFs and Ethereum ETFs is thought to support this.
The report said, “The fact that BTC has an attractive feature for investors ‘digitally’, while ETH does not, reveals this difference.”
However, according to analysts, this may not be a completely negative development for ETH. Before ETH spot ETFs entered the market, the implied volatility difference between Bitcoin and Ethereum was around 5 percent, but today it has increased to 20 percent.
“As a more speculative and volatile asset, ETH is prone to exponential price increases, with the potential for larger declines,” QCP said.
Structural signals are positive for Bitcoin
Despite the decline throughout the week, demand for call options with a $100,000 strike price expiring in 2025 has begun to increase.
This structural demand for BTC could lead to a significant upward movement and keep Bitcoin strong in the long term.