The launch of the Ethereum Spot ETF in the United States has generated significant market discussion and various predictions regarding ETH's short to mid-term price trajectory. Multiple analysts and institutions have shared their insights on potential fund flows and price impacts.
Early Trading Performance and Initial Reactions
Trading for the spot Ethereum ETFs officially began on the morning of July 23rd. According to data from Bloomberg ETF analyst Eric Balchunas, the group of spot ETH ETFs achieved a trading volume of $112 million within the first 15 minutes of trading. This was considered a massive volume for a new ETF launch, though it was only about half of the first-day trading volume of the Bitcoin ETF group (excluding GBTC). Grayscale's ETHE led with $39.7 million in volume, followed by Bitwise's ETHB with $25.5 million, BlackRock's ETHA with $22.5 million, and Fidelity's FETH with $15.2 million.
This strong initial showing, while below Bitcoin's historic launch, was still seen as exceeding some expectations and demonstrated solid initial investor interest.
Analyst Projections for Fund Flows
Projections for how much capital the new Ethereum ETFs will attract vary widely among different firms and analysts.
- Wintermute's Estimate: The large market-making firm anticipates that the Ethereum ETFs could see up to $4 billion in net inflows from investors over the next year. This is a more conservative estimate compared to others. They project that these inflows could drive the price of ETH up by approximately 24% over the next 12 months.
- Citi Bank's Outlook: Analysts at Citi predict net inflows for Ethereum ETFs could be equivalent to 30-35% of those seen by Bitcoin ETFs. This would translate to potential net inflows of $4.7 billion to $5.4 billion within the first six months. However, they note that the lack of a staking reward feature and Bitcoin's first-mover advantage could result in lower-than-expected flows.
- Bitwise's Bullish Forecast: Matt Hougan, Bitwise's Chief Investment Officer, presented one of the most optimistic forecasts. He suggested that the spot Ethereum ETFs could attract $15 billion in net inflows within their first 18 months. He bases this on the idea that investors will allocate to these ETFs roughly in proportion to the market caps of Bitcoin and Ethereum.
- K33 Research's Analysis: This crypto analysis firm estimates inflows between $3 billion and $4.8 billion in the first five months. They believe this supply absorption shock should lead to a positive price impact for ETH and that the omission of staking will not negatively affect inflows.
- Standard Chartered's Range: Analyst Geoffrey Kendrick provided a very wide but optimistic range, forecasting that the ETFs could bring in $15 billion to $45 billion within their first 12 months.
Diverging Views on Price Impact and the ETH/BTC Ratio
Not all analysts share a uniformly positive outlook for Ethereum's price relative to Bitcoin in the immediate aftermath of the ETF launch.
Daniel Yan, Founder of Kryptanium Capital and Co-Founder of Matrixport, maintains a contrarian view. He believes the ETH/BTC ratio is likely to move lower in the coming weeks rather than higher, potentially falling below 0.05. He cites the classic "buy the rumor, sell the news" dynamic and the possibility of net outflows from existing products as reasons for this short-term bearishness on the ratio.
This sentiment is echoed by Kaiko's Index Head, Will Cai, who noted that implied volatility metrics showed a lack of confidence in the ETF launch leading to a major price surge. He also stated that ETH's price would likely be "sensitive" to the inflow numbers in the very first few days of trading.
The Staking Omission and Its Perceived Impact
A common point of discussion among analysts is the SEC's rejection of allowing ETF issuers to stake the ETH they hold. Wintermute's report stated that this makes the ETFs less competitive compared to direct ownership, as investors holding ETH themselves can still earn staking rewards.
However, some, like K33 Research, believe this omission will not be a significant negative factor for inflows, suggesting that investors are primarily interested in the spot ETF for pure price exposure rather than yield.
Long-Term Market Growth and Broader Implications
Looking beyond the initial flows for Ethereum, the approval is seen as a major milestone with positive implications for the entire crypto ETF landscape and other digital assets.
Brokerage firm Bernstein released a report estimating that the total market for Bitcoin and Ethereum ETFs could grow to $450 billion, indicating over $100 billion in inflows to crypto ETFs in the coming years. Their analysts also predicted the Ethereum ETF approval could push the price of ETH to soar by 75% towards $6,600, drawing parallels to Bitcoin's 75% price surge following its own ETF approval in January.
Furthermore, Bernstein and others, including Standard Chartered, noted that Ethereum's approval as the first Proof-of-Stake (PoS) ETF sets a positive precedent. Geoffrey Kendrick from Standard Chartered suggested that ETFs for other cryptocurrencies like Solana (SOL) and XRP could potentially be approved in 2025, as the Ethereum approval implies these assets may not be classified as securities.
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Frequently Asked Questions
Q: How much trading volume did the Ethereum ETFs see on the first day?
A: In the first 15 minutes of trading, the combined volume for the new spot Ethereum ETFs was $112 million. This was a strong start, though about half the volume seen during the Bitcoin ETF launch.
Q: What is the general range of inflow predictions for the Ethereum ETF?
A: Predictions vary significantly, from a conservative $3-4 billion in the first five months to highly optimistic projections of $15-45 billion within the first year from various analysts and institutions.
Q: Why are some analysts cautious about ETH's price after the ETF?
A: Some analysts point to the "sell the news" effect, potential net outflows from existing products like Grayscale's ETHE, and the lack of a staking feature making the ETFs less attractive than direct ownership for some investors.
Q: Could the Ethereum ETF approval lead to ETFs for other cryptocurrencies?
A: Yes, many analysts believe the approval sets a positive regulatory precedent, increasing the likelihood that ETFs for other major cryptocurrencies like Solana (SOL) could be proposed and potentially approved in the future, possibly as early as 2025.
Q: How does the inability to stake affect the Ethereum ETF?
A: The SEC did not allow issuers to stake their held ETH. This means ETF investors do not earn staking rewards, which some analysts believe makes the product less competitive and could dampen interest from yield-seeking investors.
Q: What was the initial institutional interest like compared to Bitcoin?
A: Several reports and analysts, including from Genesis Global Trading, indicated that initial institutional interest and preparatory activity for the Ethereum ETF were noticeably lower than they were for the Bitcoin ETF before its launch.