Ether Primed for ETF Boom as CryptoQuant Flags Undervalued Rally Potential

Forget ’wait and see’—smart money’s already circling. CryptoQuant’s latest data shows Ether trading at a discount just as institutional players sharpen their ETF appetites.

The ETF Effect: More Than Just Bitcoin’s Sidekick

While Bitcoin ETFs hog headlines, Ethereum’s quietly building a derivatives backbone that could make its next rally stick. Open interest up, funding rates stable? That’s institutional-grade FOMO brewing.

A Cynic’s Take:
Wall Street loves nothing more than a narrative it can repackage—first Bitcoin ’digital gold,’ now Ether ’tech play.’ At least this time the underlying blockchain actually does something.

One thing’s clear: When ETF desks start accumulating, retail traders get a front-row seat to the squeeze. Buckle up.

Investors appear to be taking notice. Demand for the ETH ETF has sharply picked up, with the ETH/BTC ETF holdings ratio rising steeply since late April, according to data from CryptoQuant.

This shift in allocation suggests institutional investors anticipate ETH will outperform BTC, potentially fueled by the recent Pectra upgrade or a more favorable macroeconomic environment.

Already, the ETH/BTC price ratio has rebounded 38% from its weakest level since January 2020, suggesting investors and traders are betting the bottom is in and an "alt season" could soon follow.

This echoes what some market participants have been telling CoinDesk.

March Zheng, General Partner of Bizantine Capital, said in a recent message that traders should remember that ETH has typically been the main on-chain altcoin indicator for risk-on, and its sizable upticks generally lead to broader altcoin rallies.

On-chain data further supports this optimism. ETH spot trading volume relative to BTC surged to 0.89 last week, its highest since August 2024, signaling renewed appetite from investors. A similar trend occurred between 2019 and 2021, when ETH went on to outperform BTC by fourfold.

CryptoQuant also notes that ETH exchange deposits, often an indicator of selling pressure, have dropped to their lowest relative level since 2020, implying investors anticipate higher prices ahead.

For now, confirmation hinges on ETH decisively breaking above its key 365-day moving average against BTC.

Still, with compelling undervaluation, rising institutional interest, and diminishing selling pressure, ETH appears positioned for significant upside in the coming months.

But one thing ETH is still lagging on is network activity, as CryptoQuant flagged in a prior report. Without more people using Ethereum, it will be tough for the token’s price to lift off and head to the moon.