Ethereum Set to Outperform Bitcoin as Spot ETFs Anticipate Strong Institutional Inflows

  • The enthusiasm around Ethereum futures on CME has led experts to forecast a surge in demand for a spot Ethereum ETF.
  • K33 Research’s recent analysis suggests strong institutional interest if a spot Ethereum ETF is approved.
  • Predictions indicate that Ethereum might outperform Bitcoin in the near future.

The launch of a spot Ethereum ETF could trigger significant inflows and possibly lead to ETH outperforming BTC, as per K33 Research.

High Institutional Demand Predicted for Ethereum ETFs

Comparing the open interest (OI) for Ethereum and Bitcoin futures on CME, K33 Research foresees a robust institutional demand for a spot Ethereum ETF. The research anticipates around $4.8 billion in inflows once the ETF is live. This considerable investment is expected to give Ethereum a trading advantage over Bitcoin in the days ahead.

Forecasted $4 Billion Inflows for Spot Ethereum ETFs

K33 Research’s projections are based on the existing AUM of Ethereum-related exchange-traded products and the participation seen in similar Bitcoin products. They examined the open interest in Ethereum futures on CME, which currently stands at 23% of Bitcoin futures. Since the introduction of ETH futures in 2021, they have secured a 35% share of BTC futures, highlighting strong institutional demand for Ethereum.

Given these figures and the $14 billion inflows into spot Bitcoin ETFs, K33 suggests that spot Ethereum ETFs could witness inflows between $3 billion and $4.8 billion within the first five months of their launch. At the present ETH price, this would entail the acquisition of around 800,000 to 1.26 million ETH, equating to approximately 0.7%-1.05% of the total circulating supply.

ETH Set to Outperform BTC

Historically, the launch of spot Bitcoin ETFs led to a 60% price surge for BTC. K33 Research believes that Ethereum, following the launch of its spot ETFs, will start outperforming Bitcoin, reversing the trend of the past two years. Notably, K33 remarked that the absence of staking in ETFs hasn’t deterred investments. In Canadian and European ETFs, an overwhelming majority of assets remain in non-staking funds.

Conclusion

The potential approval of a spot Ethereum ETF might trigger significant institutional inflows, strengthening Ethereum’s market position. K33 Research’s optimistic projections underscore a future where Ethereum could potentially outshine Bitcoin, driven by robust demand and strategic investor interest.

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