According to a Bloomberg report, analysts recently Approved Ethereum ETFs in the US may generate far less demand than spot Bitcoin products. Major financial institutions including BlackRock and Fidelity are awaiting final approval from the Securities and Exchange Commission (SEC) to list their long-awaited Ethereum funds.
However, JPMorgan strategists expect net inflows into Ethereum ETFs to be much smaller than the $15.3 billion that has flowed into Bitcoin this year.
Analysts are divided on the potential of an Ethereum ETF.
sugar report, the five-month-old Bitcoin ETF’s success can be attributed to its controversial narrative that presents Bitcoin as digital gold, a concept that Ethereum lacks. Additionally, Ether funds do not provide staking rewards for blockchain maintenance, a feature available to those who hold tokens directly.
Caroline Bowler, CEO of BTC Markets Pty, highlights that ETH lacks the same profile as Bitcoin. Bitcoin’s market value is $1.4 trillion, three times that of Ethereum. This discrepancy suggests that U.S. Ethereum ETFs may not have a similar impact.
Surprisingly, the SEC recently announced its intention to approve an Ethereum spot ETF. bitcoin fund Although the 2023 court ruling boosted Ethereum’s price, Ethereum’s 109% gain over the past year still lags Bitcoin’s 169% gain, including a record high in March.
JPMorgan Strategist Led by Nikolaos Panigirtzoglou Going forward, the Ethereum portfolio is estimated to attract a “modest” $1 billion to $3 billion in net inflows over the remainder of the year.
However, Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, reports that these products may struggle to capture 20% of the current $62.5 billion worth of Bitcoin ETF assets in the United States.
Despite these doubts, Vetle Lunde, senior research analyst at cryptocurrency specialist K33 Research, remains optimistic, predicting a valuation of $4 billion. net inflow For the Ethereum ETF, the first five months saw a significant “supply shock” that could push the price of ETH higher.
VanEck’s Ethereum bullishness
VanEck, a fund manager aiming to launch an Ethereum ETF, sees the popularity of the token-based Ethereum blockchain, particularly its potential for cryptocurrency financial services applications.
Matthew Sigel, head of digital asset research at VanEck, believes investors will eventually recognize greater application and innovation potential within the Ethereum ecosystem than Bitcoin.
It is worth noting that the launch of nine new US ETFs for Bitcoin on January 11 initially caused the price of Bitcoin to decline. price of bitcoin, coupled with the outflow from Grayscale Bitcoin Trust. However, the strength of demand for new ETFs eventually overshadowed these concerns and Bitcoin resumed its upward trajectory.
Likewise, asset manager Grayscale plans to convert its $11 billion Ethereum product into an ETF similar to a Bitcoin fund. Redemptions by the Grayscale Fund could lead to selling pressure on ETH, but the overall market impact remains unclear.
As of the time of writing, ETH Bitcoin is trading at $3,830 and Bitcoin continues to approach the record high of $73,7000 it reached in March. Ethereum is still far from the all-time high of $4,866 achieved during the 2021 bull run.
Featured image of DALL-E, chart from TradingView.com