by Sidhartha Shukla
In the shadow of Bitcoin topping $100,000, a rally in Ether is building steam, with investors betting the second-biggest cryptocurrency will surpass the record it reached three years ago.
Ether exchange-traded funds listed in the US saw a record daily inflow of $428 million on Thursday, data compiled by Bloomberg show. The token has soared 61% to outperform Bitcoin since Donald Trump’s Nov. 5 election victory, which touched off a crypto rally on expectations of friendlier regulations.
Trump’s appointment of Paul Atkins to run the Securities and Exchange Commission has added to tailwinds for Ether. ETFs investing in the token don’t allow investors to reap yield from staking Ether, a hurdle to their popularity which some observers expect could be lifted under Atkins, who’s a member of the advisory board of crypto advocacy group Token Alliance.
Bitcoin surged past $100,000 shortly after Atkins’s appointment was made public.
“Now that Bitcoin has hit $100,000 it appears that investors are seeking the next opportunity,” said Nick Forster, founder of crypto trading platform Derive.xyz. “Ether is still well below its all-time highs from 2021 and investors are beginning to rotate down the crypto risk curve.”
Ether traded at $3,881 as of 9 a.m. in London, some 20% off its record high.
Among other signs that investors anticipate more gains, open interest in Ether futures contracts has surged to record levels on CME Group Inc.’s derivatives exchange, far outpacing the rise in similar contracts for Bitcoin.
“US institutions are more heavily weighted toward regulated investment vehicles, hence more concentration is seen in CME Ether futures and the token’s ETFs,” said Le Shi, Hong Kong-based managing director at market-making firm Auros.
Copyright Bloomberg News
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