QCP Capital forecasts significantly greater volatility for Ethereum compared to bitcoin

Quick Take

  • Ethereum is poised for larger price swings than bitcoin, with its volatility premium widening to 8%, analysts said.
  • Analysts favor Ethereum accumulation due to its cost-effective spot price and robust performance amid wider crypto market fluctuations.

Ethereum is anticipated to experience significantly larger price swings than bitcoin in the future, as reflected in the higher options volatility premium for the second-largest asset by market capitalization.

"The volatility premium of Ethereum to bitcoin has widened to about 8% for the longer tenor expiries, up from 4% last week," QCP Capital analysts said.

QCP Capital analysts also expressed a preference for accumulating Ethereum, noting its cost-effective spot price when considering the rise in the asset's implied volatility.

Ethereum remains more robust than bitcoin

The analysts observed that Ethereum has maintained its price more effectively than bitcoin, despite the market caution that followed the U.S. government's transfer of 30,000 BTC, valued at approximately $2 billion, to an unidentified wallet, according to Arkham Intelligence data.

"Ethereum spot has performed relatively well compared to bitcoin following Trump's speech, with the ETH-BTC trade gaining 5% since, despite its fourth consecutive day of spot exchange-traded (ETF) outflows," QCP Capital analysts said.

Spot Ethereum ETFs experienced negative net flows in their first week, marked by $1.5 billion in net outflows from Grayscale’s ETHE. In contrast, just over $1 billion in net inflows were recorded into eight competing funds, including BlackRock's ETHA and Bitwise’s ETHW.

However, QCP Capital analysts noted that if outflows from Grayscale's ETHE become exhausted and daily inflows into Ethereum ETFs increase, the second-largest digital asset could experience a significant upward breakout.

Ethereum has traded flat over the past 24 hours, now changing hands for $3,354 as of the time of writing, according to The Block's Price Page.


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Brian McGleenon is a UK-based markets reporter for The Block. He has worked as a financial journalist and producer for multiple news outlets over the years, such as Fuji Television, The Independent, Yahoo Finance, The Evening Standard, and The Daily Express. Brian is also a screenwriter and producer with one feature film produced and one in development with Northern Ireland Screen. Apart from web3 and cryptocurrency developments, he is also interested in geopolitics, environmental issues, artificial intelligence, and longevity research. Get in touch via email [email protected].

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