Lack of Demand for Ethereum ETFs
Analysts predict that the recently approved Ethereum ETFs in the US may not generate as much demand as their Bitcoin counterparts. Major institutions like BlackRock and Fidelity are waiting for final SEC approvals to launch these funds.
Reasons for Lower Demand
- Bitcoin’s “digital gold” narrative is more appealing than Ether’s.
- Ethereum ETFs won’t offer staking rewards like holding Ether directly.
- Ether’s market value is significantly smaller than Bitcoin’s.
SEC’s Shift in Stance
The SEC’s recent willingness to approve spot Ethereum ETFs is a surprising change after rejecting them earlier. This has boosted Ether’s price, but it still lags behind Bitcoin’s gains.
JPMorgan’s Modest Expectations
JPMorgan strategists estimate that Ethereum ETFs will attract only $1-$3 billion in net inflows for the rest of the year. They believe these products may struggle to capture even 20% of the current Bitcoin ETF assets in the US.
Optimistic Outlook from Others
Despite the reservations, some analysts remain optimistic. K33 Research predicts $4 billion in net inflows for Ethereum ETFs in the first five months, potentially boosting ETH’s price.
VanEck’s Bullish View
Fund manager VanEck believes in the potential of the Ethereum blockchain and its applications in crypto financial services. They expect investors to recognize the greater potential for innovation within the Ethereum ecosystem.
Grayscale’s Plans
Grayscale plans to convert its Ethereum offering into an ETF, similar to its Bitcoin fund. This could create selling pressure on ETH, but the overall market impact is uncertain.
