Ethereum
Ethereum ETFs Will Attract Over $4 Billion in Inflows, Says Analyst K33
Ethereum ETFs Will Attract Over $4 Billion in Inflows, Says Analyst K33
At the end of May 2024, the Securities and Exchange Commission (SEC) moved the Ethereum Spot ETF the requests move to the next stage of deliberation, opening the door to the start of negotiating the funds as early as this summer. The approvals surprised many, as the SEC had not addressed the issue much after approving spot Bitcoin ETFs in January. With these approvals, many are speculating about what ETFs could look like once they begin trading. Some predict they could be hugely successful.
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Many consider net inflows to be a key metric in determining the success of an ETF. This figure provides a solid indication of the performance and sustainability of the ETF over the long term. According to market analysis and brokerage firm K33 Research, Ethereum ETFs could generate up to $4.8 billion in net inflows in the first five months after launch.
The company made this prediction using current figures for Ethereum ETFs linked to futures contracts and comparing them to Bitcoin products. Additionally, K33 Research believes that Ethereum will begin to outperform Bitcoin and the broader crypto market after the ETFs launch. This would match Bitcoin’s performance after the approval of Bitcoin ETFs when the price of BTC increased by over 60% and reached all-time highs.
JP Morgan also predicted that ETFs would bring in $3 billion in inflows in the first five months.
Spot Bitcoin ETFs have set the bar high for ETF launches. The 11 ETFs experienced the greatest success in history, accumulating more than $12 billion in net inflows in just over two months. The funds hold more than $30 billion in total inflows, totaling about $15 billion after accounting for Grayscale’s outflows.
Many believe that Ethereum ETFs will be successful, although less than Bitcoin ETFs. Bitcoin is considered the safest bet among crypto investments due to its size and longevity. Although Ethereum has similar characteristics, Bitcoin’s greater degree of these attributes makes institutions more open to Bitcoin investments.
Despite Bitcoin’s dominance in the crypto market, Ethereum has established itself as a strong #2 token, emphasizing decentralized finance and community-created applications. In the long term, these use cases could potentially elevate Ethereum relative to Bitcoin, as Ethereum could have more room to adapt to changing market conditions. However, as things stand, Ethereum is still behind Bitcoin, which should be reflected in ETF trading figures.
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