Bitcoin (BTC) fell for the fourth day in a row on Friday, wiping out the majority of the gains penned on Monday.
The world’s largest cryptocurrency closed 1.7% on Thursday, with the BTC/USD pair dipping another 0.8% this morning.
Attention has firmly shifted to Ethereum (ETH), the second-largest cryptocurrency, following spot-ether approvals in the US.
Speaking on the development, crypto ETP provider ETC Group suggested that the regulatory nod, which effectively brings ether to the mainstream stock market, will result in approximately $1.65 billion of “potential” net inflows in the first three months of trading.
“The approval marks a significant shift in sentiment within the SEC and among US regulators in general but US investors still received inferior investment vehicles compared to European vehicles,” said ETC Group.
It may take a few months for the ETF products to officially launch, ETC Group suggested. Once they do, ETC Group suggested a potential 92% increase on the ETH/USD pair.
Explaining their reasoning, ETC analysts highlighted ether’s “higher sensitivity to global ETP flows than bitcoin in the past”.
They noted that an increase of global Ethereum assets under management by 1% is historically associated with an average ETH/USD performance of 6.15% per week, far higher than bitcoin’s comparable beta.
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“As a caveat, keep in mind that correlation does not imply causation and that higher net inflows could possibly not cause increases in price,” they added.
At the time of writing, ETH/USD was swapping for $3,706, over 22% higher week on week.
Interestingly, the pair dipped 2% following the SEC’s approval, suggesting the event was already priced in.