As traders eagerly anticipate the arrival of spot Ethereum ETFs in the market, there is a moderate degree of excitement surrounding these investment vehicles. Despite a relatively uneventful week, projections from K33 research suggest that Ethereum ETFs could potentially witness a significant influx of funds within the initial five-month period after their launch. The anticipated arrival of Ethereum-based exchange-traded funds in the United States is expected to mirror the explosive path witnessed during the launch of Bitcoin ETFs, according to the research firm.
K33 Research predicts that spot Ethereum ETFs may see around $4 billion in inflows within the first five months of their launch. The comparison between the assets under management in existing Ethereum-based exchange-traded products worldwide and similar Bitcoin products highlights a potential for significant institutional demand for ETH exposure in the US market.
The approval of spot Bitcoin ETFs led to a significant rally in the price of Bitcoin, driving it to new record highs. With the introduction of Ethereum ETFs, K33 suggests that Ethereum may outperform Bitcoin after lagging behind for nearly two years. Bloomberg ETF analyst Eric Balchunas predicts that Ethereum ETFs will attract between 10% and 20% of the inflows witnessed by Bitcoin ETFs.
The spot Ethereum ETF applicants have strategically removed portions from their filings that would have permitted staking of the fund’s assets. This strategic move is likely to appease the SEC’s concerns, as the regulator views staking as an illegal offering by cryptocurrency platforms. The firm highlighted that in Canadian Ethereum ETFs, 99% of assets under management do not involve staking, while in European products, the corresponding figure stands at 98%.
Overall, the anticipation of Ethereum ETFs in the market is met with a sense of excitement and high expectations for significant inflows. As the launch of these investment vehicles draws closer, traders and investors eagerly await the potential impact on the price and performance of Ethereum in comparison to Bitcoin. The strategic filings and regulatory considerations surrounding Ethereum ETFs further highlight the cautious approach taken by market participants in navigating the evolving landscape of cryptocurrency investment opportunities.
