Ether ETF Speculation Could Weigh on SOL, Wider Altcoin Market

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Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Renewed hopes of an ether ETF debut in the U.S. is likely to see investors take money out of SOL and other alternative cryptocurrencies to invest into ETH.underperformingthat a spot ether exchange-traded fund will be approved in the U.S., opening the doors to a deluge of institutional money.that the U.S. Securities and Exchange Commission had asked firms looking to list and trade ether ETFs to update and refile documents necessary to secure regulatory approval.

That meant investors had an incentive to sell ether and buy SOL, BTC and other coins much as in forex markets investors sold the yen in favor of relatively high-yielding currencies like the dollar, euro and British pound. The SOL-ETH ratio has risen by 287% since October, and the ETH-BTC ratio has declined by 16.6%, according to TradingView.

"The derivatives market believes that the current jump in ether is more likely caused by speculative sentiment. The front end of theexchange rate term structure has seen some contango, but the back end remains in backwardation. This implies that investors have not changed their views on the long-term performance of ETH compared to BTC," said Griffin Ardern, head of options trading and research at crypto financial platform BloFin, in a Telegram chat.

 

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