In a recent video, analyst Scott Melkar discussed the current market dip due to the summer slowdown, but highlighted positive changes ahead for the crypto industry. One major development is the launch of the Ethereum spot ETF, which Bitwise CIO Matt Hougan predicts could attract up to $15 billion in the first 18 months.
Initially, there was a lack of enthusiasm surrounding these Ethereum ETFs, with some online predictions suggesting they would not succeed. However, looking at investor behavior in markets like Europe, Canada, Coinbase, and Binance, it is clear that investors consistently choose to invest in Ethereum, leading Hougan to believe the same trend will follow here.
Hougan also shared a conversation he had with the head of a $100+ billion advisory firm, who expressed hesitancy to invest in Bitcoin due to a preference for diversification. The head mentioned that once an Ethereum ETP is available, they would feel more comfortable investing.
Hougan’s prediction of $15 billion in investments within the first 18 months is based on the success proportionate to Bitcoin and Ethereum in the market. He emphasized that despite a period of high correlation when the Fed made historic interest rate adjustments, crypto has only been correlated for 5% of its history. Adding crypto to a portfolio and rebalancing can lead to higher risk-adjusted returns, higher returns, and the same or lower volatility.
Hougan concluded by stating that not having exposure to crypto means missing out on a significant portion of the market, likening it to owning the market but not owning Nvidia. He highlighted the potential benefits of including crypto in an investment portfolio.