Crypto exchange BloFin predicts that the upcoming launch of spot Ethereum exchange-traded funds (ETFs) in the US will trigger a short-term increase in ETH prices as investors shift focus from Bitcoin to Ethereum, the second-largest cryptocurrency by market capitalization. This expectation was outlined in a June 26 research note shared with CryptoSlate.

BloFin highlighted various indicators, including options skewness, portfolio adjustments, and whale holdings, suggesting that the introduction of these ETFs will likely boost Ethereum’s short-term price.

The analysts stated:

“BTC’s relative strength has persisted for several months, but investor sentiment is changing: they now anticipate that ETH’s performance will strengthen with the listing of the spot ETH ETFs.”

Last month, the US Securities and Exchange Commission (SEC) approved key filings for spot ETH ETFs, surprising many market participants. Since then, ETF applicants have been in discussions with SEC staff, with rumors suggesting these financial instruments could start trading as early as the first week of July.

BloFin observed that while Bitcoin’s skewness data had been more bullish than Ethereum’s for most of this year, recent weeks have seen a reversal. Investors’ short-term expectations for Bitcoin are now "neutral" to "slightly bearish," while their expectations for Ethereum are increasingly bullish.

Despite sustained bullishness for Bitcoin’s medium and long-term prospects, investor optimism for Ethereum has overtaken that for Bitcoin in the short term. One reason for this shift, according to the note, is the potential for higher returns from assets with lower market cap and higher volatility during interest rate cut cycles.

BloFin also expects that the "asset allocation period" following the approval of spot Ethereum ETFs will positively impact ETH’s price, similar to Bitcoin’s experience earlier this year.

Additionally, the latest forward exchange rate term structure of ETH/BTC indicates that investors believe ETH will outperform BTC in the coming months, pushing the exchange rate higher in the short term.

The analysts added:

“The Risk Premium difference between ETH and BTC has also narrowed to within 25 basis points, with investors anticipating new wealth effects from ETH following the listing of spot ETH ETFs.”

On-chain data supports this bullish outlook, with ETH whales ceasing to sell their holdings, while BTC whales continue to sell. This trend might be attributed to miners selling BTC for cash or investors adjusting their portfolios.