Focusing on spot Bitcoin exchange-traded funds (ETFs) in the short term may be “something of a distraction” from the more important crypto trends emerging in the post-ETF environment, say Coinbase analysts David Duong and David Han.
In the Coinbase “Monthly Outlook: Post-ETF Trading Themes” report published on Feb. 8, the analysts point out “short-term overestimation” of the performance impact behind the $1.46 billion inflow into spot Bitcoin (BTC) ETFs in January.
Despite the launch of spot Bitcoin ETFs becoming a “watershed moment for the crypto economy,” U.S. spot Bitcoin ETFs now account for “only 10-15%” of the total Bitcoin spot trading volume across centralized exchanges (CEX) globally, the study authors stated. The spot Bitcoin ETFs hold around 650,000 BTC or 3% of outstanding Bitcoin supply, the report added.
According to data from CoinMarketCap, Bitcoin’s spot trading volume amounted to $29.5 billion over the past 24 hours at publication time. According to public trading data, 10 spot Bitcoin ETFs traded roughly $1.3 billion on Feb. 8, which accounted for around 4.4% of Bitcoin traded on CEXs over the past 24 hours.
The Coinbase analysts say there have been more important crypto themes emerging in the aftermath of the spot Bitcoin ETF launches in the U.S., including the rising decentralized finance (DeFi) activity, which could “add meaningfully” to the value proposition for Ether (ETH).
As 58% of the total DeFi value remains locked on the Ethereum blockchain, the analysts see ETH strength as one of the three key themes in the industry alongside DeFi growth and selling pressure on Bitcoin miners as the halving approaches.
“We think the Bitcoin halving in April may negatively affect the economics around mining, potentially increasing the sell pressure on miners as margins narrow and less excess profit can be retained in Bitcoin,” the study reads, adding that the impact of miner selling may not be immediate.
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As Cointelegraph previously reported, activity has plunged in the past few years after the total value locked (TVL) in DeFi peaked above $200 billion in October 2021. The DeFi TVL has been picking up so far in 2024, surging 18% from $55 billion on Jan. 1 to $65 billion at the time of writing, according to data from DefiLlama.
The price of ETH has also seen significant growth year-to-date, adding 7% from $2,350 on Jan. 1 to reach $2,510 at the time of writing, according to data from CoinGecko. Ethereum community member and investor Ryan Berckmans believes that Ethereum’s switch from a proof-of-work to a proof-of-stake consensus mechanism could drive ETH’s price to as high as $27,000 during the bull cycle.
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