Why Ethereum ETFs’ billion dollar hopes could end in disappointment
The post Why Ethereum ETFs’ billion dollar hopes could end in disappointment appeared on BitcoinEthereumNews.com.
Crypto industry analysts hold diverse views on the potential performance of spot Ethereum exchange-traded funds (ETFs) as their anticipated launch draws closer. While some predict strong inflows, others caution that demand may fall short of Bitcoin ETF levels. Also Read: Gary Gensler optimistic about spot Ethereum ETF approval progress The performance of the new investment vehicles will depend on post-launch price correction and Ethereum’s unique challenges. Ethereum ETF bets less bullish without ‘carry trades’ Matt Hougan, the investment brain at Bitwise, is leading the optimism charge. He’s forecasting $15 billion in Ethereum ETF inflows over the next year and a half. He has based this prediction on Ethereum’s market cap compared to Bitcoin and some number-crunching from international ETF markets. He starts with a $100 billion estimate for Bitcoin ETF assets by the end of 2025. Ethereum’s market cap is about 26% of Bitcoin’s, so he figures Ethereum ETFs should aim for around $35 billion. After considering international market data and the lack of a profitable “carry trade” for Ethereum, Hougan came to that $15 billion prediction. Also Read: Ethereum ETF launch preceded by high network activity, low gas fees, and price weakness Carry trades is a profitability shortcut that includes borrowing at lower interest before investing in a higher yield investment. There Is No Interest In A Ethereum ETF https://t.co/Pe0Da3sX6V — Vance Spencer (@pythianism) June 25, 2024 For instance, a Bitcoin ETF investor could buy a spot and sell a Bitcoin futures contract and profit from the difference. But, likely due to differences in the ETH futures market structure, liquidity between Bitcoin and Ethereum, and lack of staking, the same would probably not apply. Less hype due to Ethereum ETFs second entry JPMorgan’s analysts predicted a modest $1-3 billion in inflows for the ETH ETFs last month. Their reasoning?…
Filed under: News - @ June 27, 2024 1:24 am