Spot Ethereum ETFs Projected to Attract $15 Billion in Initial 18 Months of Trading
Bitwise’s Chief Investment Officer, Matt Hougan, recently discussed the potential inflows that the US Spot Ethereum ETFs could garner within the first 18 months of trading. Hougan provided detailed insights into the basis for his estimations, emphasizing that it was not mere speculation. Here are the key points highlighted by Hougan:
– Market capitalizations of Bitcoin and Ethereum will influence investor allocations to their respective ETPs
– US investors have already injected $56 billion into Spot Bitcoin ETPs, with expectations of hitting $100 billion by 2025
– Spot Ethereum ETFs would need to accumulate $35 billion in assets to match Bitcoin ETFs and could take about 18 months to achieve this goal
Using Global ETP Markets as a Benchmark
Hougan referenced the international ETP markets, illustrating that investors tend to allocate funds to Bitcoin and Ethereum ETPs in proportion to their market capitalizations. Key points discussed by Hougan include:
– European Bitcoin and Ethereum ETPs have €4,601 and €1,305 in assets, representing 78% and 22% of available funds, respectively
– Canadian Bitcoin and Ethereum ETPs have $4,942 CAD (77%) and $1,475 CAD (23%) in assets, respectively
– Extrapolating Ethereum’s market share in Canadian ETPs to the US market, the estimated net inflows for Spot Ethereum ETFs were adjusted from $25 billion to $18 billion, excluding Grayscale’s assets
Further adjustments were made to the estimated net inflows, reducing it to $15 billion by accounting for carry trades in the US Spot Bitcoin ETFs. As a result, the estimates were lowered to $90 billion for Bitcoin and $15 billion for Spot Ethereum ETFs.
Hot Take: A Look into the Future of Spot Ethereum ETFs
As the crypto market continues to evolve, the introduction of Spot Ethereum ETFs presents a significant opportunity for investors. With predictions of substantial inflows within the first 18 months, these ETFs could reshape the landscape of digital asset investments. Stay tuned for the latest updates on the development and performance of Spot Ethereum ETFs as they unfold.
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