Markets
Ethereum ETFs to See $500M Inflows in First Week, Analyst Says – DL News
- Ethereum ETFs are on the verge of going public.
- Not only could prices rise, but analysts also expect massive inflows into the funds.
In the first week, investors will invest up to $500 million in Ethereum spot exchange-traded funds.
Lennix Lai, Chief Commercial Officer of cryptocurrency exchange OKX, says this.
“While the AUM of ETH ETFs may not be as high as that of BTC ETFs, their trading volumes can reach a similar level,” he told DL News.
Lai added that the launch of the new funds will inevitably trigger a new cryptocurrency rally, mirroring broader sentiment in the sector.
Nine potential applicants are waiting for the U.S. Securities and Exchange Commission to greenlight their ETFs.
Market observers to expect Ethereum ETFs will launch shortly after the Independence Day holiday.
Record inflows
Lai isn’t the only one who’s optimistic.
Jacob Joseph, CCData Analyst said DL News that inflows into Ethereum spot ETFs will reach $3.9 billion within the first 100 trading days.
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Similarly, Matt Hougan, chief investment officer at Bitwise, said that spot Ethereum ETFs could see $15 billion in inflows within the first 18 months of trading.
Price Action
Not only would ETFs make cryptocurrencies more attractive to investors, but the fact that 27% of Ethereum is locked up could send prices soaring, experts say.
“This could potentially lead to short-term shortages, hence price increases, and make ETH an attractive option for institutional asset allocation,” Lai said.
Founder of Lekker Capital Quinn Thompson suggested that Ethereum could rise to $7,000.
Of course, not everyone is convinced that once these funds are launched there will be a recovery.
The “expectations of cryptocurrency natives are exaggerated and disconnected from the true preferences of TraditionFi allocators”, Andrew Kang, managing partner of investment firm Mechanism Capital, he wrote on X.
He also argued that while Bitcoin hit record highs thanks to the launch of spot Bitcoin ETFs, this was only a contributing factor as large players like MicroStrategy bought the asset, increasing demand.
Co-head of digital operations at broker-dealer giant TP Icap, Duncan Trenholmesaid in a similar way DL News that Ethereum ETFs will be harder for large institutional investors like pension funds to sell.
Why? Because Ethereum doesn’t have the clear narrative that Bitcoin has as store of value.
As for Ethereum, Trenholme said he’s gotten questions from institutional clients like, “Is Ether just Bitcoin Lite?” “How is it different from Bitcoin?” or “Why should it have a place in an investment portfolio?”
Despite the decline, analysts at the research firm Bernstein They argue that the launch of Ethereum ETFs will boost prices in the long run as it will drive greater adoption.
Eric Johansson is the editor-in-chief of DL News. Got a tip? Email him at eric@dlnews.com.