The response to Ethereum spot ETFs has not been as enthusiastic as it was for Bitcoin products earlier in the year, according to crypto entrepreneur and investor Andrew Kang. Kang’s analysis suggests that the impact of Ethereum ETFs may not be as significant.
While Bitcoin ETFs attracted new buyers and increased BTC allocations in portfolios, Ethereum ETF flows are expected to be only 10% to 15% of Bitcoin ETF flows, resulting in $500 million to $1.5 billion in net buying over six months. Fidelity has already seeded its Ethereum ETF with $4.7 million, with Standard Chartered predicting $45 billion in inflows in the first year of trading.
However, Kang believes that an Ethereum ETF may not have as much impact as a Bitcoin ETF for several reasons. Ethereum is viewed more as a tech asset rather than a macro asset like Bitcoin, and there is less institutional interest and buying pressure due to valuation metrics. Additionally, Ethereum’s price has already increased significantly before the ETF launch.
Kang predicts that Ethereum’s price could trade between $3,000 and $3,800 before the ETF launch, potentially dropping to $2,400 to $3,000 after. He also expects a continued downtrend for the ETH/BTC ratio over the next year.
In the past 24 hours, Ethereum’s price has fallen below $3,400, along with other cryptocurrencies in the market. Bitcoin, BNB, and Solana have also experienced losses.
Despite the bearish outlook, there are some positive developments for Ethereum. Large asset managers like BlackRock could use Ethereum to tokenize real-world assets, and the US Securities and Exchange Commission closing its investigation into the Ethereum Foundation could solidify ETH’s status as a commodity rather than a security.
Overall, while the impact of Ethereum ETFs may not be as significant as Bitcoin ETFs, there are still potential opportunities for growth and development in the Ethereum ecosystem.