Ethereum (ETH) seems poised to continue outpacing bitcoin (BTC) returns in the near to medium term, according to analysis from trading firm QCP Capital. The firm points to optimism around potential regulatory approval for spot ether exchange-traded funds (ETFs) in the US as a key driver that could extend ETH’s recent gains.
Since last week’s long-awaited launch of the first spot bitcoin ETFs in the US, ETH has rallied over 5% against bitcoin’s 6% decline, showcasing its relative strength. In its latest market update report, QCP Capital suggests this divergence could persist thanks to the building narrative of spot ether ETF products also receiving clearance this year.
QCP expects Ethereum to outperform Bitcoin
“We expect ether to continue outperforming bitcoin over the medium term as the narrative rotates to potential ETH spot ETF approvals,” the report states.
Supporting this view, the recent eth/bitcoin exchange rate shows a rise from 0.05 to 0.06 in the past week as ether increases its bitcoin pairing value.
QCP also highlights key upcoming catalysts that could sustain Ethereum’s upside momentum, with the next being the mid-April Bitcoin halving event. From there, anticipation will likely turn to spot ether ETF verdicts, potentially as early as May.
With traders sensing the winds shifting in ETH’s favor, on-chain data also reflects ETH’s strength. According to IntoTheBlock, the percentage of circulating ETH supply currently in profit has spiked to over 91.8%. That represents a multi-year high for ETH. Meanwhile, bitcoin’s percentage of supply in profit has decreased to 86.2% as bearish sentiment mounts.
For now, traders seem focused on the possibilities ahead for ether ETFs rather than recent bitcoin product launches. And with fundamentals and on-chain signals flashing bullish as well in early 2024, analysts will watch closely to see if ETH can continue outpacing BTC.