Bitrabo Editorial
A recent report from Bloomberg indicates that the anticipated launch of Ethereum ETFs in the US may not garner as much interest as Bitcoin products, with financial giants like BlackRock and Fidelity awaiting final SEC approval to introduce the Ethereum funds.
JPMorgan analysts foresee lower net inflows into Ethereum ETFs compared to the substantial $15.3 billion seen in Bitcoin vehicles this year.
Experts Offer Mixed Views on Ethereum ETFs Potential
According to the report, the success of Bitcoin ETFs is attributed to the portrayal of Bitcoin as digital gold, a narrative that Ethereum lacks. Furthermore, Ethereum ETFs won’t provide staking rewards as holding the token directly does.
Caroline Bowler, CEO of BTC Markets Pty, points out the disparity in market value between Bitcoin at $1.4 trillion and Ethereum, suggesting that Ethereum’s impact through ETFs might not match Bitcoin’s.
The SEC’s recent indication of approving spot Ethereum ETFs, following the acceptance of Bitcoin funds in 2023, has had a positive effect on Ether’s price. However, Ethereum’s gains of 109% in the past year still lag behind Bitcoin’s 169% surge, including its peak in March.
JPMorgan predicts a modest influx of $1 billion to $3 billion in net inflows into Ether portfolios for the remainder of the year. Yet, Bloomberg Intelligence’s Eric Balchunas reports that Ethereum ETFs might struggle to attract 20% of the existing $62.5 billion in Bitcoin ETF assets in the US.
Vetle Lunde from K33 Research holds an optimistic view, forecasting $4 billion in net inflows within the first five months for Ethereum ETFs and a potential price boost for ETH due to a significant “supply absorption shock.”
VanEck Optimistic About Ethereum
VanEck, a fund manager looking to launch an Ethereum ETF, sees promise in the widespread use of the Ethereum blockchain, particularly in crypto financial services.
Matthew Sigel, Head of Digital-Asset Research at VanEck, believes investors will eventually recognize Ethereum’s greater potential for innovation and application compared to Bitcoin.
While the launch of nine new Bitcoin ETFs in the US initially led to a drop in Bitcoin’s price, followed by outflows from the Grayscale Bitcoin Trust, the sustained demand for these ETFs ultimately overshadowed these concerns, propelling Bitcoin’s upward trend.
Grayscale intends to convert its $11 billion Ethereum offering into an ETF like its Bitcoin fund, potentially causing selling pressure on ETH, although the overall market impact remains uncertain.
At present, ETH is trading at $3,830, while Bitcoin is nearing its record high of $73,700 reached in March. Ethereum still has a way to go to reach its all-time peak of $4,866 from the 2021 bull run.
Image source: DALL-E, chart source: TradingView.com