At the moment, Ethereum offers the most attractive growth prospects among the major cryptocurrencies. These results come from a survey of digital-asset managers conducted by CoinShares.
The second-largest cryptocurrency by market cap was mentioned by ~44% of respondents. For comparison, about 39% voted for Bitcoin, and Solana ~7%.
The survey results run contrary to publicly reported data on inflows into digital investment products. Ethereum was named the least-loved altcoin in those figures.
Since the start of the year, clients have withdrawn from Ethereum-based funds for $125m. The launch of trading of Ethereum-ETF has not fundamentally changed the trend.
The chart below shows that since the previous survey, managers have increased their share of Bitcoin and other altcoins. This occurred due to reductions in positions in the second-largest cryptocurrency and in a basket of assets other than digital gold.
The sample was formed by representatives of 58 firms with AUM above $500 billion.
The CoinShares findings align with the assessment of analysts K33 Research. The latter noted that they no longer share a ‘bearish view on Ethereum.’
Experts noted that the shift in market sentiment is corroborated by the narrowing of the premium on futures on the CME relative to Bitcoin. A similar picture has formed on offshore derivative platforms, as well as in the Ethereum options market.
Analysts suggested that traders have hedged less the risks associated with digital gold using instruments tied to the second-largest cryptocurrency. This was driven by the ETH/BTC ratio falling to July 2022 lows. The specialists forecast that the value will continue to rebound after a drop to 0.05.
Analysts are also bullish on Ethereum’s prospects, according to Peter Brandt, an analyst and head of Factor LLC. He noted the completion of a nine-day flag pattern, which confirmed the completion on October 23 of a right-angled expanding triangle. The latter served as a reversal pattern.
Another example of classical charting principles
Completion today of small 9-day flag reconfirms Oct 23 completion of right angled expanding triangle $ETH pic.twitter.com/sDW5YMhF0e— Peter Brandt (@PeterLBrandt) November 2, 2023
Separately, K33 Research stressed that double-digit premiums in futures and record open interest on CME underscore sustained institutional demand and a bullish outlook for Bitcoin in November.
According to the experts, after the rally, the number of short positions in perpetual contracts declined, pushing funding rates out of negative territory. Analysts pointed to low open interest, indicating a modest risk of new liquidation waves in the near term.
Despite significant changes in derivatives, there are no obvious signs of a sustained rise in the volume of spot trades, according to K33 Research. The analysts say trading activity spikes during active periods and then returns to prior levels.
As noted earlier, since the start of the year Ethereum whales (over 1000 ETH, about $1.5m) have reduced positions by 12 million ETH, while Bitcoin whales (over 1000 BTC, about $26.9m) have been accumulating coins.
Earlier, Jeffrey Kendrick, head of research at Standard Chartered, predicted the price rise of the second-largest cryptocurrency to $8,000 by the end of 2026.