Ethereum Will Hit $5,000 After ETFs Launch, Predicts Bitwise Exec
The post Ethereum Will Hit $5,000 After ETFs Launch, Predicts Bitwise Exec appeared on BitcoinEthereumNews.com.
We do the research, you get the alpha! Get exclusive reports and access to key insights on airdrops, NFTs, and more! Subscribe now to Alpha Reports and up your game! Go to Alpha Reports Matt Hougan, chief investment officer at Bitwise Asset Management, forecasted on Wednesday that the price of Ethereum could surge past $5,000 following the launch of Ethereum ETFs. “[ETF] inflows will push prices to all-time highs, above $5,000,” he declared. “By year-end, I’m confident the new highs will be in.” Hougan’s prediction is grounded in the belief that ETF inflows will significantly impact Ethereum’s price by creating new sources of demand—similar to what was observed with Bitcoin after its funds launched. But it will take some time. “I think the first few weeks could be choppy, as money may flow out of the $11 billion Grayscale Ethereum Trust (ETHE) after it converts” to an ETF, he wrote. The primary driver for this anticipated price surge is the interplay between supply and demand, he said. ETFs introduce new demand without altering Ethereum’s underlying supply fundamentals. Hougan noted that Bitcoin ETFs have purchased 263,965 BTC since their January launch, compared to 129,181 BTC produced by miners, resulting in a substantial price increase. Hougan outlines three key reasons why Ethereum might see an even greater impact from ETF inflows than Bitcoin. First, Ethereum’s inflation rate has been 0% over the past year, meaning the supply of ETH has remained constant at 120 million. This contrasts with Bitcoin’s 1.7% inflation rate at the time its ETFs launched. Hougan said Ethereum-based stablecoins and tokenized funds support the equilibrium between ETH creation and consumption, leading to price appreciation. Secondly, Hougan pointed to staker dynamics. Unlike Bitcoin miners who need to sell their mined BTC to cover operational costs, Ethereum stakers are not under the…
Filed under: News - @ July 19, 2024 4:20 am