Introduction

In just a few days, the ETH ETFs are scheduled to go live. While most are speculating on the short- and long-term flows for these products, another question arises: Can this catalyst for ETH be captured with increased exposure through levered ETH beta?

ETH betas are a reference to altcoins within the Ethereum ecosystem that, in theory, should act as levered exposure to ETH. Common examples include LDO or ENS, and traders trade these on the idea that they have more volatile moves relative to ETH itself. The term ‘ETH betas‘ has mostly been a meme as of late, however, due to the general underperformance of altcoins. Picking an ETH-correlated alt as levered exposure has been like finding a needle in a haystack and often leads to traders and investors underperforming ETH on a higher time frame.

So, is this time really different? Moving towards the launch of ETH ETFs, is the best strategy to bet on altcoins with higher beta relative to ETH? Today’s article explores this question from a quantitative standpoint.

[Bullets]

• Price Performance
• Correlation
• Beta
• Sharpe Ratio
• Conclusion

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Price Performance