Net inflows into spot Ether exchange-traded funds (ETFs) could reach an impressive $20 billion within the first year, according to a recent report by Steno Research.
The research firm highlighted Ether’s attractive qualities for Wall Street investors, suggesting that the current pessimism in the crypto market surrounding the forthcoming launch of spot ETH ETFs may be unfounded.
“We continue to forecast a net inflow between $15 billion and $20 billion in the first 12 months, even considering the outflow from the Grayscale Ethereum Trust (ETHE),” stated senior analyst Mads Eberhardt in the report.
Eberhardt anticipates that this substantial influx of capital will significantly increase the value of Ether in dollar terms and enhance its competitive position against Bitcoin.
Ether Predicted to Reach $6,500 Post-ETF Launch
Steno Research further predicts that Ether could achieve a minimum price of $6,500 by the end of this year, driven by the expected inflows into spot ETFs and other favorable market factors.
The imminent launch of spot Ether ETFs in the U.S. follows the recent approval of filings by issuers from the Securities and Exchange Commission (SEC). Reports suggest that these new products could commence trading as early as next week, pending final approval of the S-1 filings.
If the projected inflows into spot Ether ETFs materialize, the ether/bitcoin ratio could strengthen to 0.065 by the end of the year, according to Steno Research. The report emphasizes that due to Ether’s lower market capitalization and liquidity compared to Bitcoin, even smaller inflows into Ether ETFs would significantly impact its value.
Varied Predictions on Ether ETF Inflows
While Steno Research is optimistic about the outlook for spot Ether ETF flows, other entities offer different predictions. Galaxy Research estimates $5 billion of net inflows into spot Ether ETFs within the first five months, whereas Bitwise Asset Manager anticipates $15 billion in net inflows within the initial 18 months.
Potential Downside: Ether Could Drop to $2,400
Conversely, Andrew Kang, a founder and partner at Mechanism Capital, suggests that Ether’s price could drop significantly to as low as $2,400 following the launch of spot ETFs. Kang argues that Ether attracts less institutional interest compared to Bitcoin and that there are limited incentives for converting spot Ether into ETF form. He expects spot Ether ETFs to attract around 15% of the flows seen by spot Bitcoin ETFs, a range echoed by Bloomberg ETF analysts Eric Balchunas and James Seyffart, who project 10-20% of the flows.
Asset Managers Submit Revised Proposals for Ethereum ETFs
Several prominent asset managers have submitted revised proposals for Ethereum ETFs to the SEC. VanEck, BlackRock, Grayscale, Invesco Galaxy Digital, and Fidelity aim to provide updated information on their respective Ethereum funds, according to Bloomberg analyst Eric Balchunas. VanEck’s filing disclosed a management fee of 0.20% for its Ethereum fund, aligning with competitors like Franklin Templeton, which charges 0.19% in management fees.
As the crypto industry continues to evolve, the launch of spot Ether ETFs and the subsequent market reactions will be closely watched by investors and analysts alike.
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