Bitcoin trails Ether as ETF hype shifts to crypto’s second-largest token

Mumbai – The Ether token is outshining Bitcoin partly on speculation that the next wave of spot US crypto exchange-traded funds (ETFs) will focus on the second-largest digital asset, heralding increased investor demand.

So far in 2024, Ether has climbed 30 per cent versus Bitcoin’s 22 per cent advance, a reverse from 2023, when the biggest token set the pace. Ether rose 1.5 per cent to trade near US$3,000 as at 7.44am on Feb 22 in Singapore – close to the highest level since April 2022 – while Bitcoin edged higher towards US$52,000.

Wary regulators in the United States approved the nation’s first spot Bitcoin ETFs in January in the wake of a court defeat in 2023. The group of 10 portfolios has attracted a net inflow of US$5.2 billion (S$7 billion) since going live on Jan 11. While some crypto fans view the funds as a precedent paving the way for Ether ETFs, others are sceptical that officials will accede to them and anticipate further legal drama.

“I expect Ether to continue to outperform Bitcoin in the coming months, at least until April to May when the potential ETF approval looms closer,” said Mr Stefan von Haenisch, head of trading at OSL SG in Singapore.

But he added he is doubtful that US Securities and Exchange chair Gary Gensler would approve Ether ETFs unless forced to by court decisions.

In the derivatives sector, open interest in CME Group’s Ether futures marketplace is close to a record high. The increase in outstanding contracts is an indication of demand for Ether-related exposure from institutional investors.

Ether is the token of Ethereum, the crypto sector’s commercially most important blockchain. Investors can earn rewards by pledging Ether to help operate the digital ledger, a process called staking. The proportion of Ether being staked has reached an all-time peak of 25 per cent, according to tracker Validator Queue, curbing supply and providing a potential prop for prices. BLOOMBERG