Spot Ether ETF Launch: Bitwise CIO Predicts Rough Start but Significant Impact on Price
Title: Spot Ether ETFs Expected to Have Significant Impact on Asset’s Price, Bitwise CIO Predicts
The launch of United States spot Ether exchange-traded funds (ETFs) is anticipated to have a substantial impact on the price of Ether, according to Bitwise Chief Investment Officer Matt Hougan. Despite an initial rocky start, Hougan believes that Ether ETFs could have a bigger influence on the asset’s price compared to Bitcoin ETFs.
Hougan highlighted three main reasons why he expects Ether ETFs to make a significant impact. Firstly, he noted that Ether’s inflation rate is effectively zero due to the widespread usage of Ethereum-based applications, resulting in a limited amount of new ETH being created daily. Additionally, unlike Bitcoin miners who are required to sell their mined coins to cover operational costs, ETH stakers do not face significant direct expenses.
Furthermore, approximately 28% of all ETH is currently staked and locked away, reducing the amount of available supply in the market. This scarcity factor could contribute to a surge in Ether’s price once the ETFs are launched.
The spot Ether ETF is set to debut on July 23, with Bloomberg ETF analyst Eric Balchunas confirming the launch date. Hougan predicts that the ETF will drive Ether’s price above $5,000 by the end of 2024, representing a 47% increase from its current price of $3,401.
While Hougan’s forecast is optimistic, he also acknowledged that the actual price movement could surpass expectations if the inflows into Ether ETFs exceed market predictions. Other crypto traders, such as Daan Crypto Trades, share a similar bullish sentiment regarding the potential impact of ETF flows on Ether’s price.
However, not all traders are as optimistic as Hougan. Pseudonymous trader Kaleo believes that Ether’s price may experience a temporary decline following the ETF launch. Despite differing opinions among traders, the overall sentiment remains positive towards Ether’s price trajectory in the near future.
As the market eagerly awaits the launch of the spot Ether ETF, investors and traders are advised to conduct their own research and exercise caution when making investment decisions. The potential impact of ETF flows on Ether’s price remains a topic of interest within the crypto community, with varying predictions on how the asset will perform in the coming months.
