The cryptocurrency community is eagerly awaiting the launch of a spot Ethereum exchange-traded fund (ETF) in the United States, which some analysts believe could attract massive capital flows into the market.
Bitwise Chief Investment Officer Matt Hougan is optimistic about the potential of these investment products and predicts significant inflows into spot Ether ETFs within the first month of trading.
“Ethereum ETPs will attract $15 billion in net flows in their first 18 months on the market,” Hougan declared on June 26 as part of an X Post analysis.
Hougan’s $15 billion prediction is based on a thorough analysis of available data, including the Ethereum (ETH) market cap vs. Bitcoin (BTC) market cap, the international cryptocurrency ETP market, Grayscale’s Ethereum Trust (ETHE) conversion, and the spot Bitcoin ETF trade.”
Analysts expect investors to allocate to Bitcoin and Ethereum ETFs roughly in proportion to their market capitalization.
“In the absence of other information, investors are expected to allocate to BTC and ETH ETPs roughly in line with their market caps: BTC: $1.266 billion (74% of the market) and ETH: $432 billion (26% of the market).”
Hougan arrives at a percentage by accumulating only the market capitalization of the top two cryptocurrencies.
“U.S. investors have invested $56 billion in spot Bitcoin ETPs,” Hougan explained. “As these ETFs mature and are accepted by platforms such as Morgan Stanley, we expect this figure to reach $100 billion by the end of 2025,” he added.
Using $100 billion as a benchmark and subtracting the $10 billion Ethereum Trust that was converted into Grayscale’s ETF, spot ETFs could see net inflows of $25 billion.
To verify these numbers, he further analyzed the international ETF market and found that Canada and Europe have similar investment splits between the two assets. This means that Bitcoin ETPs account for approximately 78% of total assets under management (AUM) and Ethereum ETPs account for approximately 22%. ).
“The fact that the asset split in the two regions is nearly identical suggests that this split broadly captures the relative demand for BTC and ETH among ETP investors.”
The International Ethereum ETF reduces its estimate from $25 billion to $18 billion as it only has about 22% total market share compared to Bitcoin.
Finally, Hougan expressed reservations that he would not participate in an Ethereum “carry trade” like he did with the Bitcoin ETF, as the institution does not stake the U.S. spot Ethereum ETF, considering the potential impact of the “carry trade”. .
A carry trade means purchasing an asset in the spot market and selling that asset in the futures market. The goal is to profit from price differentials when an asset’s futures contract is trading at a premium to the spot price.
To keep his estimates conservative, Hougan removed the $10 billion AUM associated with carry trades when assessing the size of the Bitcoin market, which would lead to $15 billion in net inflows in Ethereum ETPs by the end of 2025. A revised estimate was derived.
“I think the ETH ETP will be a huge success. At least, that’s what the data says.”
Meanwhile, issuers of promising spot Ethereum ETFs continue to finalize registrations ahead of launch after receiving approval from the U.S. Securities and Exchange Commission (SEC) on May 23.
Companies have been filing amended Form S-1 registration statements as part of the process. The spot Ether ETF could begin trading in the U.S. by July 2, according to Bloomberg ETF analyst Eric Balchunas.
On June 25, investment manager VanEck filed Form 8-A with the SEC for its spot Ether ETF, moving it one step closer to launch.
Ethereum price finds support around $3,300.
Data from IntoTheBlock shows ETH finding support around the $3,300 demand zone. The In/out of the Money Around Price (IOMAP) model, which shows information about addresses that bought an asset within a certain price range, suggests that this level is in the $3,257 to $3,557 price range, with addresses previously at about 2.73 million. Bought 1.4 million ETH.
Looking at the ETH/USD weekly chart, we can see that the 20-week exponential moving average (EMA) is currently located here, providing a strong defense for bull market investors.
From a technical perspective, the Relative Strength Index remains in positive territory above the midline, with a price strength of 55 suggesting that market conditions still have room for upside.
In the near term, traders appear to be setting Ethereum price targets in the $3,500 to $3,973 range.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.