Ethereum
Ethereum ETF demand could be muted compared to Bitcoin ETFs, analysts say
The highly anticipated launch of Ethereum ETH/USD exchange-traded funds (ETFs) in the United States may see a more muted response compared to the initial response. the enthusiasm generated by Bitcoin ETFs, analysts predict.
What Happened: JPMorgan strategists, led by Nikolaos Panigirtzoglouestimate that Ethereum ETFs will attract between $1 billion and $3 billion in modest net inflows by the end of the year, a stark contrast to the $15.3 billion raked in by Bitcoin ETFs, according to Bloomberg research . report.
Ethereum’s 109% price increase over the past year lags behind Bitcoin’s 169% rise.
James DaviesCPO and founder of Crypto Valley Exchangetold Benzinga that analysts expect demand for Ether ETH/USD, due to its importance relative to Bitcoin, is not as widely known and accepted by the public.
Caroline BowlerCEO of BTC Markets Ptyagreed, noting: “Ether does not have the profile of Bitcoin”, and stressed BitcoinThe BTC/USD market value of $1.4 trillion, three times that of Ether.
SEC Approval Process
Davies optimistic about approval process under SEC chairmanship Gary Genslerstating: “Everyone sees that ETH ETFs will be adopted very soon. »
He added that refusal of these ETFs would likely result in legal action, similar to the legal action seen with Bitcoin ETFs.
Marko JurinaCEO of Jumper.Exchangeis also awaiting approval, stating, “Chances for issuance are imminent,” given recent regulatory developments.
Long-Term Benefits of Ethereum ETFs
Despite the expected drop in demand, Ethereum ETFs offer unique advantages.
“ETH has utility not generally present in the Bitcoin ecosystem, much of the overall crypto ecosystem is tied to ETH,” Davies noted, suggesting significant long-term growth potential.
VanEckhead of digital assets research, Matthew Sigelsupported this view, stating: “Over time, we expect investors to conclude that the potential for application and innovation within the Ethereum ecosystem could be much greater than that of Bitcoin . »
Potential Selling Pressure and Market Dynamics
Concerns remain about selling pressure related to Grayscale’s planned conversion of its $11 billion Ethereum fund into an ETF.
Davies warned: “The potential ‘selling pressure’ on Ether resulting from redemptions from Grayscale’s Ethereum fund could be significant.
However, he also noted that net inflows to BTC ETFs could potentially offset this pressure.
Broader investor sentiment
Ether continues to trade below its all-time high of $4,866, with global investors showing less enthusiasm than Bitcoin.
ByteTree Asset ManagementIt is Charlie Morris observed: “Global investors have been less enthusiastic about Ether, which they have had access to through Europe and Canada for years. »
The implications of these developments and broader trends in digital asset investing will be a key topic at Benzinga. The future of digital assets event on November 19.
Industry leaders will provide valuable insights into how these strategic developments and regulatory changes are shaping the market. the future of the cryptocurrency market.
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