Ethereum Spot ETFs Forecasted for $15 Billion Inflows

Quick Look:

Ethereum (ETH)’s $405 billion market cap is significantly smaller than Bitcoin’s $1.2 trillion.
Analysts forecast $15 billion in net inflows for Ethereum spot ETFs within 18 months.
Typically, 75% of crypto holdings are in Bitcoin and 25% in ETH.
ETH ETFs aim for $25 billion in assets by the end of 2025, aligning with current trends.

Analysts predict that Ethereum spot exchange-traded funds (ETFs) will experience substantial net inflows of $15 billion within 18 months. This forecast showcases market dynamics, historical data, and comparative investor behaviour between ETH and Bitcoin.

ETH’s market capitalisation currently stands at $405 billion, significantly smaller than Bitcoin’s $1.2 trillion market cap. Historical data reveals that Bitcoin ETFs attracted $15 billion in net inflows within five months of their launch. Thereby underscoring a robust investor appetite for cryptocurrency-based ETFs. These figures suggest a potential for strong inflows into ETH ETFs as well.

Crypto ETF AUM to Hit $100 Billion by 2025

Investors traditionally allocate approximately 75% of their cryptocurrency holdings to Bitcoin and 25% to Ethereum. Therefore, such distribution is the ETH’s growing acceptance and potential for substantial ETF inflows as the market matures. The total assets under management (AUM) for cryptocurrency ETFs will reach $100 billion by the end of 2025. Of this, Bitcoin ETFs are projected to hold $50 billion. For Ethereum to keep pace, it would need to achieve $25 billion in ETF assets over the next 18 months, a goal deemed attainable given the current market trends.

Grayscale Ethereum Trust Benchmark: $10 Billion AUM

The Grayscale Ethereum Trust provides a relevant benchmark. Moreover, it has amassed $10 billion in assets on its launch day. This precedent supports the feasibility of Hogan’s $15 billion inflow prediction for Ethereum spot ETFs. Examining the international market, Europe and Canada exhibit a similar trend where Bitcoin holds a 78% share of exchange-traded products (ETPs), with Ethereum capturing 22%. Therefore, this distribution aligns closely with the anticipated investor behaviour in the U.S. market.

$10B Bitcoin ETF Carry Trade Not Included in Prediction

In evaluating the market, several adjustments took place. The carry trade accounts for $10 billion in Bitcoin ETF assets and does not include Ethereum ETFs. Additionally, concerns about performance differences between the two cryptocurrencies, such as ETH’s native staking feature, have been dismissed as non-impactful to the overall inflow predictions. Hougan’s final estimate of $15 billion in net inflows for Ethereum spot ETFs over the next 18 months is expected to have a significant market impact. This prediction highlights the growing interest in Ethereum and underscores its potential to play a pivotal role in the evolving landscape of cryptocurrency investments.

Crypto Market Up 0.61%, Bitcoin at $61K, Ethereum Stable

The cryptocurrency market has seen a modest increase in valuation, rising by 0.61% over the past 24 hours. Bitcoin’s price hovers around $61,000, although its trading volume has dropped by 36.61% to $27.57 billion. Ethereum’s price has shown little change, moving less than 0.1%. Exhibiting a sideways trading pattern, it reflects a period of market consolidation. This current market behaviour underscores cryptocurrencies’ dynamic and sometimes volatile nature as investors continue to navigate the complexities of this emerging asset class. As Ethereum spot ETFs gain traction, they are likely to influence these market trends further, contributing to the overall growth and stability of the cryptocurrency sector.