- Ethereum ETFs are on the cusp of trading.
- Not only could prices go up, but also analysts expect massive inflows into the funds.
Investors will pour up to $500 million into spot Ethereum exchange-traded funds in their first week.
That’s according to crypto exchange OKX’s Chief Commercial Officer Lennix Lai.
“While the AUM of ETH ETFs may not be as high as BTC ETFs, their trading volumes can reach a similar level,” he told DL News.
Lai added that the launch of the new funds will invariably kick off a new crypto rally, echoing wider industry sentiment.
Nine prospective applicants are waiting on the US Securities and Exchange Commission to green light their ETFs.
Market watchers expect spot Ethereum ETFs to launch some time after the Independence Day holiday.
Record inflows
Lai isn’t alone in his bullishness.
CCData analyst Jacob Joseph told DL News that inflows into spot Ethereum ETFs will reach $3.9 billion within the first 100 days of trading.
Bitwise’s Chief Investment Officer Matt Hougan has similarly said spot Ethereum ETFs could enjoy inflows to the tune of $15 billion within the first 18 months of trading.
Price action
Not only would ETFs make crypto more attractive to investors, but the fact that 27% of Ethereum is locked up could drive prices higher, experts say.
“This could potentially lead to scarcity in the short-term, hence price increases, and make ETH an attractive option for institutional asset allocation,” Lai said.
Lekker Capital founder Quinn Thompson has suggested that Ethereum could surge to $7,000.
To be sure, not everyone is convinced that a rally will kick off when these funds launch.
The “expectations of crypto natives are overinflated and disconnected from the true preferences of TradFi allocators,” Andrew Kang, managing partner at investment firm Mechanism Capital, wrote on X.
He also argued that while Bitcoin did soar to record highs on the back of spot Bitcoin ETFs launching, it was only a contributing factor — with big players like MicroStrategy buying the asset having drummed up demand.
The co-head of digital assets at broker dealer giant TP Icap, Duncan Trenholme, similarly told DL News that Ethereum ETFs are going to be a harder sell for large-scale institutional investors like pension funds.
Why? Because Ethereum lacks the clear narrative that Bitcoin has as a store of value.
When it comes to Ethereum, Trenholme said he fielded 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 bearishness, analysts at research firm Bernstein say the launch of Ethereum ETFs will drive prices higher in the long run as they’ll lead to more adoption.
Eric Johansson is DL News’ News Editor. Got a tip? Email him at eric@dlnews.com.
