- The much-anticipated launch of US spot Ethereum (ETH) ETFs is generating significant buzz in the financial markets.
- However, analysts predict that these ETFs may not perform as well as their Bitcoin (BTC) counterparts.
- Bloomberg ETF analyst Eric Balchunas suggests that ETH ETFs might capture only 20% of the market share of BTC ETFs.
US spot Ethereum ETFs could struggle to match the success of Bitcoin ETFs, potentially capturing only 20% of the market share, according to Bloomberg analyst Eric Balchunas.
Ethereum ETFs: A Comparative Analysis
The much-awaited launch of US spot Ethereum (ETH) ETFs may struggle to replicate the success of the Bitcoin (BTC) ETFs. According to Bloomberg ETF analyst Eric Balchunas, the much-hyped spot ETH ETFs might grab about 20% of the BTC ETF’s market share. Balchunas’ analysis is based on the performance of ETH vs. BTC futures ETFs and the historical comparison of Silver vs. Gold ETFs.
Market Share Projections
Balchunas projects that US ETH ETFs could attract less capital flow compared to US BTC ETF products. He bases this projection on the current market share in the futures market, where ETH ETFs command about 20% on average compared to BTC ETFs. This trend is likely to continue in the spot market as well.
“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,” said Balchunas.
Ethereum ETF vs. Silver ETF
The analyst’s projection of 20% market share for ETH ETFs is also based on a comparative analysis with Silver ETFs. Currently, Silver ETFs hold only 15% of the market share compared to Gold ETFs. Balchunas equates BTC to Gold and ETH to Silver, suggesting that many investors may not feel the need to go beyond Bitcoin for their crypto allocations.
“Many won’t feel the need to go beyond bitcoin/gold for their crypto/precious metals allocation,” stated Balchunas.
As of May 28th, US spot BTC ETFs had $13.7 billion in total flows. Based on Balchunas’ projection, this could equate to $2.7 billion for ETH ETFs over the same period. However, data from Hong Kong’s leading ETF funds show that BTC flows were twice as much as ETH flows for spot products.
Global Perspectives
According to data from Farside, Hong Kong’s Bosera spot BTC ETF saw total inflows of $15.3 million, compared to $7.5 million for its ETH ETF product. This translates to about 50% of BTC ETF flows for Bosera’s spot ETH ETF. However, according to CoinMarketCap data, ETH’s $454 billion spot market cap is 34% of BTC’s $1.3 trillion.
Despite these projections, some analysts expect the US spot ETH ETF products to launch in July, with predictions that the ETH price could hit $4.5K before they start trading.
Conclusion
In summary, while the launch of US spot Ethereum ETFs is highly anticipated, they are expected to capture only a fraction of the market share compared to Bitcoin ETFs. Analysts like Eric Balchunas suggest that ETH ETFs might achieve around 20% of BTC ETFs’ market performance. Investors should consider these projections and market dynamics when making investment decisions.
