Ethereum
ETH Supply to Drop by 1.26 Million in Five Months After Spot Ethereum ETF Launch
All eyes are currently on the SEC’s decision regarding the approval of Ethereum ETF S-1 spot registrations, which could serve as a catalyst for a broader market recovery. According to a recent report from K33 Research, Ethereum could face a supply shock, with almost 1.26 million ETH likely to leave exchanges within five months of the ETF’s launch. This change could significantly increase the Ether Price (ETH)potentially leading to a new all-time high.
Spot Ethereum ETFs to Record $4 Billion in Inflows
According to K33 Research, Ethereum spot ETFs could see a staggering $4 billion inflow in the first five months after launch. K33 Research based its forecast by comparing the assets under management (AUM) of existing Ethereum (ETH)-based exchange-traded products worldwide to similar Bitcoin (BTC) products. They also analyzed open interest (OI) in futures contracts on the Chicago Mercantile Exchange (CME), a key market for institutional investors.
Currently, Ether’s open interest (OI) on the CME exchange stands at 23% of the size of Bitcoin futures contracts. However, since ETH futures began trading on CME in 2021, they have grabbed a 35% share of BTC futures, indicating that there has been a strong uptick. institutional demand for ETH
. Courtesy: Search K33
Comparing these ratios with the $14 billion in inflows for Bitcoin spot ETFs, K33 Research predicts that Ether spot ETFs could see inflows between $3 billion and $4.8 billion in the first five months following their release. launch.
Based on the current ETH price of $3,800, this could mean that 800,000 to 1.26 million Accumulating ETH this will be done via ETFs. This represents almost 0.7-1.05% of the total circulating ETH supply.
ETH to surpass Bitcoin
Shortly after the Bitcoin ETF spot approval, the price of BTC increased by 60% to record highs. According to K33 Research, if Ethereum ETFs go live, Ethereum will begin to outperform BTC, after nearly two years of underperformance.
More importantly, in his research report, he noted that removing the staking feature from ETFs would not negatively impact inflows into the investment product. K33 noted that in Canadian ETH ETFs, 99% of assets under management are housed in funds that do not involve staking, while in European products this figure rises to 98%.