By Michael Scott
Capriole Investments founder warns that the newly-approved Spot ETH ETFs coincide with a weak market, likely to fuel Bitcoin price tumble.
Charles Edwards, founder of Capriole Investments, notes that the timing of spot Ether (ETH) exchange-traded funds (ETFs) unveiling is unfortunate. Its availability in the US could tempt investors to diversify. Such incidents could become detrimental to the spot Bitcoin ETFs, particularly if investors consider diversification.
Diversification to ETH ETFs Threatens Bitcoin Price
According to Edwards, investors’ move to diversify leaves Bitcoin demand at risk, which would cause the price to decline.
The Bitcoin analyst considers the spot Ethereum exchange-traded funds launch too early. The absence of new capital flow into the market could erode the resources powering the Bitcoin price surge.
Capriole Investments founder suggests that the spot ETH ETF denies a better scenario when the BTC ETF operated as the sole exchange-traded product (ETP) this year.
Edwards argues that the ETH ETFs could distract investors holding the spot BTC ETFs. Notably, the analyst considers present institutional holders could likely consider diversifying their portfolio by buying the ETH ETF.
Edwards argues that without new capital flowing into the ETFs and the entire crypto market, it could yield sell pressure on BTC.
Since the spot Bitcoin ETFs debut on January 11, the 11 products have witnessed flow exceeding $17.50 billion, per Farside Investors data.
A detailed insight into the market shows Bitcoin dominance has been fairly stable since the Ether ETFs debuted on July 23. TradingView data shows BT. Dominance is up 0.07% in the past 24 hours.
Additionally, the spot Bitcoin ETFs suffered $78M net outflows on July 23 – a debut day for the spot Ether ETFs. However, two days from the debut day saw a reversal in trend, with inflows of $44.5M and $31.1M attained, respectively.
ETH ETFs Land on Weak Market Spell
Edwards holds that unveiling ETH ETF into the market, apparently somewhat weak or definitely not so strong, triggers uncertainty about how investors allocate capital.
Edwards admits that he foresees no strong catalysts to propel price appreciation soon.
Daily charts support Edwards observation since ETH price has dipped 9.2% since the sport ETFs debuted to exchange hands at $3,178, CoinMarketCap data shows.
The decline is evident with Ether’s value declining more against BTC. The ETH has slid 10.4% to the BTC since July 18.
Futures traders hardly anticipate sudden recovery. The situation leaves $1.32 billion in short positions at risk, particularly where the price rebounded to $3,500, according to CoinGlass data.
Other crypto analysts echo Edwards’ stance, indicating that the situation could look different in the following weeks.
Research head at CryptoQuant Julio Moreno considers in a July X post that spot ETH ETFs align with the start of BTC ETFs debut regarded as a sell-the-news event. Like Bitcoin, Moreno blames Grayscale Ethereum Trust for the underlying asset’s price plunge.
MN Trading founder Michael Pope indicates that the stagnation of the massive outflow or its subsiding below $100M will result in a market reversal.
Ethereum portrays a similar trajectory as Bitcoin following the ETF approval, crypto pundit Croissant informed his 116K X followers.
Crypto trader Kaleo confessed that Ether appears to have priced in the hype of spot ETF approval. The trader indicated that a sweep of the range lows is likely before price discovery.