$4 Billion Inflows Expected for Ethereum ETFs Within Five Months, Predicts K33 Research

  • Traders are showing a modest level of enthusiasm regarding the upcoming launch of spot Ethereum ETFs.
  • K33 Research predicts these ETFs could mirror the surge witnessed during the launch of Bitcoin ETFs.
  • The forecast indicates approximately $4 billion might flow into spot Ethereum ETFs within the first five months of their availability.

Discover the potential financial impact of the upcoming Ethereum ETFs and what experts have to say about their launch.

$4B Inflow Projected for Ethereum ETFs

The anticipated debut of Ethereum-based exchange-traded funds (ETFs) in the U.S. market is expected to generate substantial investment interest. According to K33 Research, these ETFs could attract an impressive $4 billion in inflows within the initial five months. This projection is based on historical trends and existing interest levels in similar Ethereum-based products globally.

K33 Research’s analysis involved comparing the assets under management (AUM) in current Ethereum exchange-traded products to those of Bitcoin, as well as examining the open interest in Ethereum futures on the Chicago Mercantile Exchange (CME). The CME is a renowned platform favored by institutional investors.

Currently, the open interest in Ethereum futures on the CME is at 23% of Bitcoin futures’ size, although historically, Ethereum futures have represented about 35% of Bitcoin futures’ volume. This indicates a latent demand for Ethereum exposure among institutional investors in the U.S. market, per K33’s findings.

The approval of Bitcoin ETFs led to a significant rally in Bitcoin prices, pushing them to all-time highs. K33 Research anticipates that the introduction of Ethereum ETFs could drive Ethereum to outperform Bitcoin, reversing a trend of Ethereum lagging behind for nearly two years.

Bloomberg ETF analyst Eric Balchunas previously predicted that spot Ethereum ETFs might attract between 10% and 20% of the inflows that Bitcoin ETFs received.

“10 may be a bit much. but I’d at least divide by 5 when it comes to expectations around the Ether spot ETFs re flows/volume/media/everything relative to spot bitcoin ETFs. That said, grabbing 20% of what they got would be a huge win/successful launch by normal ETF standards.”

Removal of Staking Features by Ethereum ETF Issuers

Applicants for spot Ethereum ETFs have strategically excluded staking features from their filings to address concerns by the Securities and Exchange Commission (SEC). This step is intended to alleviate potential regulatory issues, as the SEC regards staking services offered by cryptocurrency platforms as illegal and unregistered securities offerings. The SEC has already taken enforcement actions against several platforms providing staking services to U.S. customers.

K33 Research’s report further highlighted that the removal of staking features would not negatively affect the inflows into these ETFs. The firm noted that in Canadian Ethereum ETFs, 99% of the assets under management are in funds without staking, while in European products, the corresponding figure is 98%.

Conclusion

In summary, the forthcoming launch of Ethereum ETFs in the U.S. is poised to attract significant investment inflows, potentially amounting to $4 billion within five months. The removal of staking features is a strategic move by issuers to comply with regulatory concerns, which is unlikely to deter investor interest. As seen with Bitcoin ETFs, Ethereum ETFs could catalyze a substantial market movement, potentially allowing Ethereum to outperform Bitcoin in the near future.

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Gideon Wolf
Gideon Wolfhttps://en.coinotag.com/
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.
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