Ethereum Spot ETF Anticipation Rises, Could Garner 25% of Bitcoin Fund Investment


In the wake of the recent unexpected endorsement of the Ethereum Spot Exchange-Traded Fund (ETF), anticipations are mounting around the likely performance of these investment funds, in the sessions preceding their inaugural trading. Significantly, James Seyffart, a venerated Bloomberg analyst specializing in ETFs, has recently weighed in on the discussion, sharing his perspective on the possible investment proportions the Ethereum Spot ETFs could amass, in comparison to their Bitcoin-based counterparts.

During an engaging discourse hosted by Bitwise Chief Investment Officer Matt Hougan, Seyffart communicated that the anticipated demand for Ether spot ETFs could potentially generate a maximum of 25% when compared to the enthusiasm sparked by Bitcoin spot ETFs.

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Seyffart’s predictions are drawn from several factors, beginning with the notable variance in market caps between the two assets. The total market share value for Ethereum, as revealed by CoinMarket, stands at approximately $449.25 billion, which symbolizes roughly a 30% cut of Bitcoin’s imposing market value of $1.35 trillion.

In addition, Seyffart underscored significant discrepancies between both ETFs and their underlying assets. He posited that there is a wider chasm between Ethereum as an ETF and as a virtual currency than that between Bitcoin in its ETF and traditional forms.

From his view, the limiting factor for Ether spot ETFs is that an investor is diminished of native ETH capabilities such as staking—an established source of earning passive income— and other on-chain applications in forms of Decentralized Finance (DeFi), Non-fungible tokens (NFTs), Decentralized Autonomous Organizations (DAOs), etc. Consequently, certain investors might lean towards investing directly in alternative cryptocurrencies, known as altcoins.

By taking all these nuances into account, Seyffart propounds that these innovative investment funds will create “big launches”, although they will not match the levels seen by the Bitcoin spot ETFs. His prognosis for the Ethereum Spot ETFs anticipates that they will capture between 20-25% of total investment garnered by their Bitcoin-focused peers once trading initializes. His colleague, Eric Balchunas, also a Bloomberg analyst, offers a more circumspect outlook, projecting investment figures ranging from 15-20%.

Undeniably, the ensuing success—or lack thereof—of the Ethereum spot ETFs will exert significant influence over other cryptocurrency spot ETFs, which may subsequently be approved by the US Securities and Exchange Commission. The Ripple (XRP) ETF is currently predicted by numerous enthusiasts to be the market’s next fresh contender, although these expectations remain subjected to a variety of determining factors, primarily centring on regulatory clarity over the institutional transactions involving Ripple tokens.

In a tangential development, Ethereum currently trades at $3,766, marking a modest gain of 0.51% over the past day. This minimal positive movement signifies an encouraging trend in Ethereum’s form throughout the week, which has achieved a cumulative increase of 20.47% in value over the course of seven days. In contrast, Ethereum’s daily trading volume stands at $10.03 billion, representing a decline of 51.27%.