Exciting Times Ahead for Ethereum ETFs
Get ready for the anticipated launch of Ethereum-based exchange-traded funds (ETFs) in the United States. Direct investment in Ether is on the horizon, with significant inflows expected. According to the latest report from K33 Research, these ETFs could see around $4 billion in inflows within the first five months.
Comparing Ethereum and Bitcoin Products
- K33 Research compared assets under management in existing Ethereum-based ETFs worldwide with Bitcoin products.
- Analysis of open interest in ETH futures on the CME revealed significant institutional demand for ETH exposure in the US market.
- Current open interest in ETH futures on the CME is 23% of BTC futures size, but the average ETH futures share has been 35% of BTC futures since 2021.
Anticipated Market Impact
- Spot Bitcoin ETF approval led to a 60% price rally, setting new record highs.
- Ethereum ETF introduction may lead to ETH outperforming BTC after nearly two years of lagging behind.
- Bloomberg ETF analyst Eric Balchunas predicts 10-20% of Bitcoin ETF inflows for Ethereum counterparts.
Changes Made to Ether ETFs
In a strategic move to address SEC concerns, spot Ethereum ETF applicants have removed staking features from their filings. The SEC views staking as an illegal offering by crypto platforms, potentially constituting unregistered securities. Despite this change, K33’s report suggests that excluding staking from Ethereum ETFs will not impact inflows into these investment products.
Staking Trends in Ethereum ETFs
- Canadian Ethereum ETFs show that 99% of assets under management are in non-staking funds.
- European products indicate that 98% of assets under management do not involve staking.
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