Bitcoin
Demand for Ethereum ETF may be muted compared to Bitcoin ETFs, analysts say
The long-awaited release of Ethereum ETH/USD exchange-traded funds (ETFs) in the United States may see a more subdued response compared to the initial enthusiasm surrounding Bitcoin ETFs, analysts predict.
What Happened: JPMorgan strategists, led by Nikolaos Panigirtzoglouestimate that Ethereum ETFs will attract a modest $1 billion to $3 billion in net inflows by the end of the year, a stark contrast to the $15.3 billion raised by Bitcoin ETFs, according to a Bloomberg report. report.
Ethereum’s 109% price increase over the past year lags behind Bitcoin’s 169% increase.
James DaviesCPO and founder of Crypto Valley Exchangetold Benzinga that analysts expect lower demand for Ether ETH/USD as its prominence relative to Bitcoin is not as widely known and accepted by the public.”
Caroline BowlerCEO of BTC Markets Companyagreed, noting: “Ether does not have the profile of Bitcoin” and emphasized BitcoinThe market cap of BTC/USD is $1.4 trillion, which is three times that of Ether.
SEC approval process
Davies is optimistic about the approval process under the SEC chairman Gary Genslerstating: “Everyone sees that ETH ETFs will be approved very soon.”
He added that denial of these ETFs would likely lead to lawsuits, mirroring the legal actions seen with Bitcoin ETFs.
Marco JurinaCEO of Jumper.Exchangealso expects approval, saying: “Issuance chances are imminently favorable,” given recent regulatory developments.
Long-Term Advantages of Ethereum ETFs
Despite expected lower demand, Ethereum ETFs offer unique benefits.
“ETH has a utility that is not primarily present in the Bitcoin ecosystem, so much of the overall crypto ecosystem is tied to ETH,” Davies noted, suggesting significant long-term growth potential.
VanEckHead of Digital Asset Research at, Matthew Sigelsupported this view, stating: “Over time, we hope that investors will conclude that the potential for application and innovation within the Ethereum ecosystem could be much greater than that of Bitcoin.”
Potential selling pressure and market dynamics
Concerns persist about selling pressure from Grayscale’s planned conversion of its $11 billion Ethereum fund into an ETF.
Davies warned: “Potential ‘selling pressure’ on Ether from redemptions in Grayscale’s Ethereum fund could be significant.”
However, he also noted that net flows into BTC ETFs could potentially offset this pressure.
Broader Investor Sentiment
Ether continues to trade below its all-time high of $4,866, with global investors showing less enthusiasm compared to Bitcoin.
ByteTree Asset Managementin Charlie Morris noted: “Global investors have been less enthusiastic about Ether, which they have had access to through Europe and Canada for years.”
The implications of these developments and broader trends for digital asset investing will be a key theme on Benzinga Future of digital assets event on November 19th.
Industry leaders will provide valuable insights into how these strategic moves and regulatory changes are shaping the future of the cryptocurrency market.
Read next: Is Robinhood’s Crypto Swap Deal Really ‘Massive’ and the ‘First Domino to Fall?’
Image: Shutterstock