Bernstein Analysts Bearish on Ethereum Spot ETFs 😟

Bearish Outlook for Spot Ethereum ETFs

Analysts at global asset management firm, Bernstein, have expressed a pessimistic view on the future demand for Spot Ethereum ETFs. The analysts anticipate a decrease in investor interest in this recently approved investment asset due to various factors.

Factors Contributing to Anticipated Decrease in Demand

Chhugani and Sapra outlined their bearish predictions for Spot Ethereum ETFs following its launch. The lack of staking features in Spot Ethereum ETF filings is a significant factor contributing to their pessimism. However, they mentioned that over time, the “basis of trade” for these ETFs might improve, attracting more investors and enhancing liquidity.

Lack of staking features in Spot Ethereum ETF filings
Improvement in the “basis of trade” over time

Unique Trading Strategy for Spot Ethereum ETFs

The analysts proposed a unique trading strategy for Spot Ethereum ETFs to enhance market liquidity and sustainability. Investors could purchase Spot Ethereum ETFs and sell futures contracts while waiting for price convergence, ensuring a steady flow of liquidity in the ETF market.

Trading strategy involving purchasing Spot Ethereum ETFs and selling futures contracts
Enhanced market liquidity and sustainability

Impact of Bearish Outlook on Investor Inflows

If Bernstein’s bearish predictions for Spot Ethereum ETFs materialize, a decline in investor demand could lead to reduced inflows. This contrasts sharply with the significant inflows observed after the launch of Spot Bitcoin ETFs, indicating a potential shift in investor sentiment towards these investment assets.

Potential reduction in investor inflows
Contrast with strong inflows observed in Spot Bitcoin ETFs

Forecast for Spot Ethereum ETFs Launch Date

Bloomberg analyst, Eric Balchunas, predicts that Spot Ethereum ETFs will likely debut by July 2024. Asset management firm, VanEck, has filed its 8-A form for these ETFs, aligning with the timeline of roughly seven days between form filing and ETF launch observed with Spot Bitcoin ETFs.

Predicted launch date of Spot Ethereum ETFs
Alignment with filing and launch timeline for Spot Bitcoin ETFs

Concerns Over Staking Features in Ethereum ETFs

A member of the crypto community raised questions about the absence of staking features in Ethereum Spot ETFs, expressing concerns over their appeal compared to Bitcoin ETFs. Balchunas clarified that the SEC’s classification of staking as an unregistered security poses challenges for the inclusion of such features in ETF offerings.