- Ethereum ETFs are off to a rocky start.
- The question is what they will mean for prices, the market and the prospect of a Solana ETF.
- We checked in with five experts. They say this is what will happen next.
Nine spot Ethereum exchange-traded funds launched on Tuesday to industry-wide celebration.
Before their launch, pundits, degens and analysts rolled out the red carpet for the funds, predicting that they’d replicate the success of the 10 spot Bitcoin ETFs that launched in January.
If Bitcoin funds could pump the underlying asset to new heights, why wouldn’t the same be true with Ether?
Four days later, it seems the first week of spot Ethereum ETF trading has been a mixed bag.
While Ethereum ETFs bagged $107 million in total inflows on the first day of trading, Wednesday and Thursday respectively saw $133 million and $153 million in outflows, according to data from SosoValue.
And Ether is down 4.6% on the week, according to CoinGecko data.
So what happened with that promised rally?
Will spot Ethereum ETFs lead to the launch of similar Solana funds?
And what about the price of Ether?
We checked in with five market watchers to answer those burning questions.
Bitwise’s Matt Hougan
So far, the crypto rally promised by market pundits has failed to materialise.
Still, Bitwise Chief Investment Officer Matt Hougan has argued that it is only a matter of time before the ETF launches catapult Ether’s price to new heights.
Ethereum ETFs could take in $15 billion in assets within the next 18 months, Hougan wrote in a June blog post.
CCData’s Jacob Joseph
Jacob Joseph, research analyst at cryptocurrency data firm CCData, offered a similarly optimistic outlook when he spoke with DL News in June.
He said investors will likely pour $3.9 billion into spot Ethereum ETFs within their first 100 days of trading.
He extrapolated the sum from the performance of the 10 spot Bitcoin ETFs’ first 100 days.
Signum Bank’s Katalin Tischhauser
Katalin Tischhauser, head of investment research at Sygnum Bank, echoed the positive sentiment.
Traditional investors will pour into spot Ethereum ETFs over the next 12 months, with their aggregate assets under management reaching as much as $10 billion over the next year, she told DL News this week.
Ethereum’s multitude of use cases, tangible revenues and cash flows make it “a more relatable proposition for traditional investors than the concept of digital gold,” Tischhauser said.
She referred to the oft-cited idea that Bitcoin is akin to safe haven assets like gold.
OKX’s Lennix Lai
US Securities and Exchange Commission Chair Gary Gensler has said most cryptocurrencies are securities and should be regulated as such.
The SEC has sued industry heavyweights including Binance and Coinbase, accusing them of allowing users to trade unregistered securities.
The launch of spot Ethereum ETFs puts that argument to bed for some cryptocurrencies, according to Lennix Lai, crypto exchange OKX’s global chief commercial officer.
The “approval and launch of ETH ETFs shows that the SEC doesn’t define ETH as a security,” he told DL News. “This has a significant implication to the classification of Proof of Stake tokens in the market.
“This could have cleared many regulatory roadblocks, uncertainty and risks for businesses working with PoS tokens, and even paved the way for the ETFs of other PoS tokens.”
Bloomberg Intelligence’s Eric Balchunas
Solana is one token that uses Proof of Stake to secure its network.
As the fifth biggest cryptocurrency — after Bitcoin, Ether, Tether and BNB — experts have suggested that it might be next in line for an ETF.
ETF issuers VanEck and 21Shares have both applied to launch spot Solana ETFs.
Fellow issuer Franklin Templeton also bigged up Solana’s chops recently.
It will be tricky, according to Bloomberg Intelligence analyst Eric Balchunas.
While a pivot saw politicos on Capitol Hill become friendlier towards crypto and may have swayed the SEC to approve spot Ethereum ETFs, a regulatory green light for Solana hinges on what happens in the November election.
If the Democrats — who are seen as more crypto sceptic — win, then Solana ETF applications are “likely dead on arrival,” Balchunas said in a July 8 X post.
If pro-crypto candidate Donald Trump “wins, anything [is] possible,” he added.
Crypto market movers
- Bitcoin is up 4.7% over the past 24 hours to trade at $67,246.
- Ethereum is up 2% to trade at $4,238.
What we’re reading
- Trump puts spotlight on Bitcoin 2024 where men outnumber women speakers almost nine to one — DL News.
- HSBC Australia Halts Crypto Exchange Payments Following $171M Scam — Milk Road.
- BlackRock: Our Spot Ether ETFs Are Complements to Bitcoin ETFs, Not Substitutes — Unchained.
- Coinbase UK Faces $4.5 Million Fine Over High-Risk Customer Onboarding — Milk Road.
- A Trump-driven financial crisis would be Bitcoin’s true test — DL News.
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
