Analysts Differ on Potential Performance of Spot Ethereum ETFs as Launch Nears

The launch of spot Ethereum exchange-traded funds (ETFs) is drawing closer, and analysts in the crypto industry are divided on their potential performance. Some experts are optimistic about strong inflows into Ethereum ETFs, while others are more cautious, suggesting that demand may not reach the levels seen with Bitcoin ETFs.

Matt Hougan, an investment expert at Bitwise, is leading the bullish camp, predicting $15 billion in Ethereum ETF inflows over the next year and a half. He based this forecast on Ethereum’s market cap compared to Bitcoin and analysis of international ETF markets. However, he also noted the absence of profitable “carry trades” for Ethereum, which could impact the performance of the ETFs.

On the other hand, JPMorgan’s analysts have a more modest outlook, predicting $1-3 billion in inflows for Ethereum ETFs. They point out that Ethereum lacks the first-mover advantage that Bitcoin enjoyed and does not have staking rewards like Bitcoin. Despite this, ETH staked has been on the rise since January 2024, coinciding with the launch of Bitcoin ETFs.

Andrew Kang, the founder of Mechanism Capital, expects a 30% price correction for Ethereum following the ETF launch, suggesting that the approval may already be priced in. Bloomberg’s senior analyst Eric Balchunas also noted that Ethereum ETFs may only attract about 10% of the inflows seen by Bitcoin ETFs.

Competition from Bitcoin ETFs looms large, with some experts suggesting that Ethereum’s branding and market positioning could be challenges for the ETFs. Additionally, the anticipation of post-halving strength in Bitcoin may overshadow Ethereum in the near term, potentially affecting liquidity.

Overall, the launch of Ethereum ETFs is generating a mix of bullish and cautious predictions. While they may not reach the same levels as Bitcoin ETFs, the absolute market prediction for Ethereum ETFs remains uncertain and could surprise the market.