- Ethereum ETFs could launch any day now.
- Bloomberg Intelligence ETF analysts predict Ethereum ETFs will get about only 20% of the demand that Bitcoin ETFs experienced.
- Bitwise CIO Matt Hougan argued that marketing Ethereum as a technology play could help the products surpass expectations.
Spot Ethereum exchange-traded funds will launch any day now.
And there’s a chance these ETFs will greatly outperform expectations, Matt Hougan, chief investment officer at crypto index fund Bitwise, argued in a Monday report.
The key, Hougan said, is to market Ethereum as a big technology play.
“Investors love technology stocks,” he said. “Nearly all investors have exposure to high-growth tech plays like Nvidia and Meta, and relatively few have exposure to monetary assets like gold.”
Marketing Ethereum in two words
Bitcoin was created with a supply hard cap — there will never be more than 21 million coins in existence.
For that reason, the top cryptocurrency has often been described as “digital gold,” and promoted as a potential hedge against currency debasement.
But marketing Ethereum isn’t so easy.
”One of the challenges for Ethereum ETFs in penetrating the 60/40 boomer world is distilling its purpose/value into an easy-to-understand soundbite a la ‘Bitcoin is digital gold,’” Bloomberg Intelligence ETF analyst Eric Balchunas said in May.
After all, calling it a “decentralised, open-source, and distributed computing platform that enables the creation of smart contracts and decentralised applications, also known as dApps” hardly makes it easy for outsiders to understand what Ethereum actually does.
It’s for that reason — and because Ethereum futures ETFs have done poorly — that Balchunas expects spot Ethereum ETFs to attract only 15% to 20% of the demand that Bitcoin ETFs experienced.
Bitcoin ETFs have hauled in roughly $14.6 billion since their launch in January.
Technology play
But Ethereum ETFs could “surprise to the upside” if financial advisers market the product as a technology play, Hougan said.
That means completely separating Ethereum from Bitcoin in investors’ minds. And make it clear that while Bitcoin competes with gold, Ethereum is a centre of technological development.
“It’s pretty easy for me to imagine investors selling a small amount of their tech exposure and adding Ether,” Hougan said.
“I’d argue it’s easier than imagining investors carving out an entirely separate portfolio sleeve for a new monetary asset [like Bitcoin,]” he added.
Hougan isn’t the only one advocating for Ethereum ETFs to be marketed that way
Ethereum ETFs will serve as proxy vehicles to anyone seeking exposure to everything that has to do with blockchain, Quinn Thompson, founder of crypto hedge fund Lekker Capital, stated on X.
That would include tokenisation, smart contracts, DeFi, stablecoins, and NFTs.
“Remember that old saying ‘I believe in blockchain, but I’m not sure about Bitcoin.’ Now that expression is accessible for traditional investors,” Thompson said.
Tom Carreras is a markets correspondent for DL News. Got a tip about Ethereum ETFs? Reach out at tcarreras@dlnews.com
