The recent approval for Ethereum spot ETFs has caused a stir in the crypto world, but not everyone is convinced that it will be a game-changer. Bloomberg Intelligence’s Eric Balchunas predicts that Ethereum ETFs may only attract 10-15% of the assets that Bitcoin ETFs have garnered.
When comparing Ethereum’s institutional appeal to Bitcoin’s, it is clear that Ethereum is not receiving the same level of attention from institutional investors. The largest Ethereum futures ETF (EETH) manages only 4% of the assets of its Bitcoin counterpart (BITO), indicating a lack of institutional interest in Ethereum.
Despite the approval of spot Bitcoin ETFs in January leading to a significant influx of institutional investments and a surge in Bitcoin prices, it is uncertain whether Ethereum will experience a similar boost in interest. The regulatory status of Ethereum remains ambiguous, with the SEC yet to clearly define it, adding to the complexity of investing in the asset.
While there was optimism for the approval of a spot Ethereum ETF due to pro-crypto developments in the U.S., Balchunas now expects the launch of Ethereum ETFs to be underwhelming compared to Bitcoin. Analysts suggest that the traditionally lower institutional interest in Ethereum-based products in the U.S. and overseas may contribute to this lackluster reception.
In Hong Kong, Ethereum represents less than 15% of the assets under management for spot ETFs, mirroring subdued institutional interest in the asset. Similarly, the U.S. market, which already offers access to Ethereum futures ETFs, shows a lack of enthusiasm for Ethereum investments.
Despite some industry voices remaining optimistic about Ethereum’s future, particularly if regulatory uncertainties around Ethereum’s proof-of-stake are resolved, the impact of Ethereum ETF approval on institutional investment remains uncertain. It is cautioned not to expect a surge in institutional interest similar to that seen with Bitcoin.
As the market navigates these changes, Ethereum and other altcoins find themselves in a precarious position, with their future influenced by evolving trends and investor sentiment.