What to expect from Ethereum ETFs after Bitcoin ETFs’ record $14bn frenzy

What to expect from Ethereum ETFs after Bitcoin ETFs’ record $14bn frenzy
SnapshotMarkets
Ethereum ETFs are expected to launch at some point after the weekend. Credit: Andrés Tapia
  • Ethereum ETFs are expected to launch any day.
  • Experts expect explosive growth if the success of Bitcoin ETFs is replicated.
  • Bitcoin ETFs may see $50 billion in inflows over the next year.

It’s almost here.

Market watchers expect the US Securities and Exchange Commission to approve spot Ethereum exchange-traded funds after the Independence Day weekend.

The launch of the funds comes after spot Bitcoin ETFs saw $14 billion in inflows since their January launch.

Those funds also catapulted Bitcoin’s price to record highs in March.

Will spot Ethereum ETFs have a similar effect?

Here’s what the experts expect.

Inflows

Spot Bitcoin ETF inflows will surge by 257% to $50 billion by the end of 2025 as large platforms like Morgan Stanley and Merrill Lynch start to approve them.

That’s according to crypto ETF provider Bitwise’s chief investment officer Matt Hougan, who made that case in an investor note this week.

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Ethereum on-exchange products will attract $15 billion in net flows in their first 18 months, he said in a separate note.

And crypto exchange OKX’s chief commercial officer told DL News he expects investors to pour up to $500 million into the ETFs in their first week.

Others offer a more bearish outlook, saying spot Ethereum ETFs will be unable to replicate the success of their Bitcoin kin.

For one, Ethereum lacks a clear narrative akin to Bitcoin’s status as a haven asset.

Mechanism Capital’s managing partner Andrew Kang and TP Icap’s co-head of digital assets Duncan Trenholme have both voiced those concerns.

Beating the odds

Hougan argued that there is a way for the world’s second biggest cryptocurrency to beat the odds — by recognising that Bitcoin and Ethereum “are as different as gold and oil.”

While Bitcoin is structured as a monetary asset, Ethereum is more like a tech platform that enables others to build new applications upon it, he said.

“Investors love technology stocks,” Hougan 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.”

But for Ethereum to beat expectations, the idea that it is a tech asset must gain momentum, he said.

That equires more adoption of Ethereum-enabled initiatives, such as stablecoin or tokenisation products.

“Maybe someone needs to launch a new ETF that’s 10% ETH and 90% tech stocks,” he said. “As a starting point for the future of technology, you could do a lot worse.”

What about the price?

Spot Ethereum ETFs launching is expected to trigger a new crypto rally.

Singapore-based QCP has suggested that Ether will surge to $5,430 on the back of the ETFs.

Others — like research firm Bernstein and Lekker Capital — suggest the launch will drive the price to $6,600 and $7,000 respectively.

For Bitcoin, Bernstein predicted that Bitcoin will reach $200,000 over the next year, helped by growing crypto adoption, Donald Trump’s pro-crypto stance, and the powerful industry lobby.

Wintermute, similarly, projected that Bitcoin can reach $100,000 before the end of the year.

In the short term, however, investors are betting that Bitcoin will continue to wobble.

Traders are hedging against a downturn — driven in part by crypto exchange Mt. Gox’s repayments to creditors, and governments selling seized Bitcoin on the open market — by piling into bullish Ether option trades.

Crypto market movers

  • Bitcoin is down 4.3% over the past 24 Horus to trade at $60,169.
  • Ethereum is down 4.3% to $3,300.

What we’re reading

Eric Johansson is DL News’ News Editor. Got a tip? Email him at eric@dlnews.com.