The crypto community is eagerly anticipating the launch of spot Ethereum exchange-traded funds (ETFs) in the United States, with analysts predicting significant capital influx into the market. Bitwise chief investment officer Matt Hougan is optimistic about the potential of these investment products, forecasting substantial inflows into spot Ether ETFs within the first few months of trading. Based on his analysis, Hougan projects that Ethereum ETPs could attract $15 billion in net flows in their first 18 months on the market.
Hougan’s projection is supported by a comparison of Ether’s market cap to Bitcoin’s, the international crypto ETP market, Grayscale’s Ethereum Trust conversion, and the “carry trade” of spot Bitcoin ETFs. He expects investors to allocate to Bitcoin and Ethereum ETFs in proportion to their market capitalizations, with BTC accounting for 74% and ETH for 26% of the market. With U.S. investors already having $56 billion invested in spot Bitcoin ETPs, Hougan believes this figure could reach $100 billion by the end of 2025 as more ETFs are approved on platforms like Morgan Stanley. Subtracting Grayscale’s $10 billion Ethereum Trust conversion, he estimates that spot Ethereum ETFs could see a net flow of $25 billion.
Analyzing international ETF markets, Hougan found that Bitcoin ETPs represent approximately 78% and Ethereum ETPs around 22% of total assets under management. This suggests a similar demand for BTC and ETH among ETP investors globally. However, since international Ethereum ETFs only capture around 22% of the market share compared to Bitcoin, Hougan revised his estimate to $18 billion in net inflows for Ethereum ETPs by the end of 2025. He also considered the impact of the “carry trade,” noting that institutions may not participate in an Ethereum carry trade due to the absence of staking in U.S. spot Ethereum ETFs.
As spot Ethereum ETF issuers finalize their registrations following approval by the U.S. Securities and Exchange Commission, ETF analyst Eric Balchunas anticipates that spot Ether ETFs could begin trading in the U.S. by July 2. Investment manager VanEck recently filed a Form 8-A, bringing its spot Ether ETF one step closer to launch.
In terms of price support, Ethereum has found stability around the $3,300 demand zone, with the 20-week EMA acting as a strong defense for the bulls. Technical indicators suggest a positive market sentiment, with traders setting price targets in the $3,500 to $3,973 range in the short term.
Please note that this article does not provide investment advice. Readers should conduct their own research and exercise caution when making investment decisions.