Bitwise’s Chief Investment Officer (CIO) Matt Hougan recently discussed the potential inflows that US Spot Ethereum ETFs could attract. According to him, these ETFs could see a significant $15 billion in net inflows within their first 18 months of trading.
Hougan explained his calculation method, emphasizing the market capitalizations of Bitcoin and Ethereum. He expects investors to allocate funds to their respective exchange-traded products (ETPs) in proportion to these market caps.
He noted that US investors have already invested $56 billion in Spot Bitcoin ETPs, with expectations for this figure to surpass $100 billion by the end of 2025. Hougan believes that the Spot Ethereum ETFs would need to attract $35 billion in assets within 18 months to match the Bitcoin ETFs.
The Spot Ethereum ETFs are predicted to have $10 billion in assets at launch, thanks to the Grayscale Ethereum Trust (ETHE) converting to an ETF. This leaves $25 billion in inflows needed to reach the anticipated level of Bitcoin ETF inflows by the end of 2025.
Hougan also referenced international ETP markets, indicating that investors may allocate to Bitcoin and Ethereum ETPs in line with their market caps. In Europe, Bitcoin and Ethereum ETPs hold 78% and 22% of available funds, respectively. In Canada, the figures are 77% and 23%.
Based on Ethereum’s market share in Canada, Hougan estimated that US Spot Ethereum ETFs could capture 22% of the US market, adjusting the net inflows estimate to $18 billion. Eventually, after factoring in carry trade-related flows into the US Spot Bitcoin ETFs, Hougan revised the estimated net inflows for the Spot Ethereum ETFs to $15 billion.
The article includes a chart showing the ETH price holding at $3,300, created with Dall.E and sourced from Tradingview.com.