- Ethereum spot ETFs are anticipated to mirror the initial success of Bitcoin-based ETFs, as projected by K33 Research.
- The forecast is derived from Ethereum’s market share in global assets under management (AUM) compared to Bitcoin.
- K33’s report suggests that Ethereum ETFs could attract up to $4 billion within five months of their launch.
K33 Research anticipates Ethereum spot ETFs to pull in $4 billion in inflows within five months, capitalizing on the cryptocurrency’s established market share.
Expectations for Ethereum Spot ETFs: A Growing Market Share
K33 Research projects that Ethereum spot ETFs will see significant uptake, drawing in approximately $4 billion within the first five months post-launch. This estimate is based on Ethereum’s 28% share of the global AUM market in comparison to Bitcoin, which is a substantial indicator of institutional interest in the asset.
Comparative Analysis with Bitcoin ETFs
As of June 3, US Bitcoin ETFs have absorbed a sizable $13.9 billion since their introduction. Globally, Bitcoin ETFs manage over 1 million BTC, representing over 5% of the circulating supply. By contrast, institutional controls over 3.3% of Ethereum’s supply. K33 Research anticipates that Ethereum ETFs could funnel between $3.1 billion to $4.8 billion, equating to about 750,000 to 1 million ETH, or 0.65% to 0.85% of its circulating supply.
Why Ethereum Futures ETF Launch Was Lackluster
The initial Ethereum futures ETF launch was markedly less impactful compared to Bitcoin futures ETFs, primarily due to less favorable market conditions at the time. K33 Research notes that this performance should not be viewed as indicative of Ethereum’s true investment potential.
Institutional Interest in Ethereum
Ethereum futures on the CME have consistently held about 22.9% of the market size of Bitcoin futures, averaging a 35% market share since their inception. From late September to December, Ethereum futures ETFs attracted 34.6% of the inflows observed by Bitcoin-based equivalents, a strong index of potential growth.
Ethereum’s Global ETP Presence
In global markets like Canada and Europe, Ethereum Exchange-Traded Products (ETPs) account for roughly one-third of the AUM held by their Bitcoin counterparts. This discrepancy affects the overall dominance of Ethereum in the market when compared to US futures-based ETH ETFs.
Industry Insights and Projections
Eric Balchunas, a noted ETF analyst from Bloomberg, has forecasted that Ethereum spot ETFs may attract between 10% and 20% of the inflows that Bitcoin spot ETFs have achieved. According to his analysis, gaining even 20% of Bitcoin ETFs’ success would be considered a major achievement by standard ETF metrics.
Conclusion
The introduction of Ethereum spot ETFs holds promise for significant investment flows, potentially amassing up to $4 billion within five months of launch. As institutional interest in Ethereum continues to grow and market conditions improve, these ETFs could capture a substantial market share, reflective of the cryptocurrency’s overall potential.
