tl;dr
Bitwise CIO Matt Hougan predicts that Ether (ETH) spot exchange-traded funds (ETFs) in the U.S. could attract $15 billion in net inflows within 18 months. This estimate is based on comparing the market caps of bitcoin and ether. However, the first-mover advantage of bitcoin may reduce the inflows in...
Ether (ETH) spot exchange-traded funds (ETFs) are anticipated to attract $15 billion in net inflows within 18 months, driven by a comparison of market caps with bitcoin. However, bitcoin's first-mover advantage may dampen the anticipated inflows into spot ether ETFs.
U.S. investors have directed $56 billion into spot bitcoin ETFs, with expectations of reaching $100 billion by 2025. Bitwise CIO Matt Hougan forecasts that the Grayscale Ethereum Trust is set to convert to a spot ETF, leaving $25 billion of inflows necessary to achieve parity with bitcoin. Yet, in Canada, ether ETPs have underperformed relative to their market cap weight, possibly due to bitcoin's first-mover advantage.
Hougan estimates that if ether ETFs capture only 22% of the market, the net new inflows could reduce to $18 billion.
The potential inflows are estimated based on comparing the market caps of bitcoin and ether. Given the current market value dynamics, investors are likely to allocate to bitcoin and ether ETFs in similar proportions.
However, the exceeding appeal of spot bitcoin ETFs, combined with the first-mover advantage, may mitigate the anticipated demand for spot ether ETFs.
Looking towards the future, the approval of spot ether ETFs in the U.S. is expected in the coming months, signaling a potential shift in the investment landscape. With Grayscale Ethereum Trust's conversion and the evolving market dynamics, the stage is set for a transformative period in the cryptocurrency investment space.