(Bloomberg) -- The Ether token is outshining Bitcoin partly on speculation that the next wave of spot US crypto exchange-traded funds will focus on the second-largest digital asset, heralding increased investor demand.

So far this year Ether has climbed 30% versus Bitcoin’s 22% advance, a reverse from 2023 when the biggest digital token set the pace. Ether rose 1.5% to trade near $3,000 as of 7:44 a.m. Thursday in Singapore — close to the highest level since April 2022 — while Bitcoin edged higher toward $52,000. 

Wary US regulators approved the nation’s first spot Bitcoin ETFs in January in the wake of a court defeat last year. The group of 10 portfolios has attracted a net inflow of $5.2 billion since going live on Jan. 11. While some crypto fans view the funds as a precedent paving the way for Ether ETFs, others are skeptical that officials will accede to them and anticipate further legal drama.

Read more: How Spot Bitcoin ETFs Became Big Win for Wall Street: QuickTake

“I expect Ether to continue to outperform Bitcoin in the coming months, at least until April-May when the potential ETF approval looms closer,” said Stefan von Haenisch, head of trading at OSL SG Pte in Singapore. 

Von Haenisch added that he’s doubtful US Securities and Exchange Chair Gary Gensler would approve Ether ETFs unless forced to by court decisions.

In the derivatives sector, open interest in CME Group’s Ether futures marketplace is close to a record high. The increase in outstanding contracts is an indication of demand for Ether-related exposure from institutional investors.

Ether is the token of Ethereum, the crypto sector’s commercially most-important blockchain. Investors can earn rewards by pledging Ether to help operate the digital ledger, a process called staking. The proportion of Ether being staked has reached an all-time peak of 25%, according to tracker Validator Queue, curbing supply and providing a potential prop for prices.

©2024 Bloomberg L.P.