Ethereum
Nobody cares about Ethereum ETFs! According to analysts
Sat June 8, 2024 ▪ 3 min reading ▪ by Eddy S.
In the dynamic world of crypto, exchange-traded funds (ETFs) represent a significant step forward for institutional adoption and mainstream investing. Recently, attention has turned to Ethereum (ETH) ETFs, which analysts believe may see more muted demand than their Bitcoin (BTC) counterparts.
Crypto: Ethereum ETFs less attractive than Bitcoin ETFs!
JPMorgan strategists, led by Nikolaos Panigirtzoglou, estimate that Ethereum ETFs could attract between $1 billion and $3 billion in net inflows by the end of the year. Unlike the $15.3 billion raised by Bitcoin ETF. This modest forecast reflects less broad recognition and acceptance of ETH compared to the crypto BTC, which has seen its price rise rapidly by 169% over the past year.
James Davies, CPO and founder of Crypto Valley Exchange, points out that demand for Ether may be lower due to its relatively less established brand awareness. Caroline Bowler, CEO of BTC Markets Pty, adds that “Ether doesn’t have the profile of Bitcoin” and highlights BTC’s market value of $1.4 trillion, three times that of Ether.
Ethereum Long-Term Outlook
Despite less enthusiastic wait, Ethereum ETFs offer unique advantages. “ETH has a utility that is mostly absent in the Bitcoin ecosystem, so a lot of the overall crypto ecosystem is tied to ETH,” says Davies, suggesting significant long-term growth potential. Matthew Sigel, head of digital assets research at VanEck, supports this view, stating that “over time, we expect investors to conclude that the potential for application and innovation within of the Ethereum ecosystem could be much superior to that of Bitcoin.
However, concerns remain over potential selling pressure due to the planned conversion of Grayscale’s $11 billion Ethereum fund into an ETF. Davies warns that “selling pressure” on Ether resulting from redemptions in Grayscale’s Ethereum fund could be significant. Nonetheless, he also notes that net inflows into BTC ETFs could potentially offset this pressure.
Finally, even if the potential demand for Ethereum ETF looks promising, they should attract much less interest than Bitcoin ETFs. Factors such as the lack of staking rewards and differences in market perception of crypto contribute to this outlook.
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Eddy S.
The world is evolving and adaptation is the best weapon to survive in this undulating universe. Basically a crypto community manager, I am interested in everything directly or indirectly related to blockchain and its derivatives. In order to share my experience and raise awareness of a field that fascinates me, there is nothing better than writing articles that are informative and relaxed at the same time.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.