Ethereum
Ethereum ETFs Could Generate $4 Billion in First Five Months: K33 Research
Ethereum spot ETFs will operate much like their Bitcoin-based predecessors, generating $4 billion in inflows within five months of launch, according to K33 Research.
“This estimate is based on ETH’s relative global assets under management (AUM) market share to BTC of 28%,” the crypto brokerage wrote in a Tuesday report. Similarly, the Chicago Mercantile Exchange’s (CME) open ETH stake currently represents 23% of Bitcoin, reflecting a similar market share in another institutional market.
As of June 3, US Bitcoin ETFs had absorbed $13.9 billion since their launch in January. Around the world, Bitcoin ETFs now control over 1 million BTC, or over 5% of the circulating BTC supply.
In contrast, institutional funds currently control 3.3% of the circulating ETH supply. Using this as a benchmark, K33 said it expects ETH ETF flows worth between $3.1 billion and $4.8 billion post-launch. This represents between 750,000 and 1 million ETH, or 0.65-0.85% of the circulating supply of ETH.
This is a big promise compared to the debut of the Ethereum futures ETF last year, which transported peanuts in assets under management alongside the launch of the first Bitcoin futures ETFs in 2021. K33 believes that this lackluster launch was an outlier given the poor timing with which Ethereum ETFs came to market and is not representative of the real investment demand for ETH.
For example, the company notes, CME ETH futures – which currently represent 22.9% of the size of Bitcoin – have held an average of 35% market share since their inception. Additionally, between September 29 and December 26, ETH futures ETFs saw 34.6% of the inflows of their Bitcoin-based counterparts.
“In Canada and Europe, ETH ETPs hold approximately 1/3 of the assets under management held by BTC ETPs,” K33 wrote. “US ETH Futures-Based ETFs Decrease Global ETH Dominance.”
Bloomberg ETF analyst Eric Balchunas previously predicted that Ethereum ETFs would return between 10% and 20% of what Bitcoin spot ETFs did. “Getting back 20% of what they got would be a huge win/successful launch by normal ETF standards,” he said. tweeted Wednesday.
Edited by Ryan Ozawa.