Ethereum ETFs are coming, and some experts believe they could send the price of ETH soaring.
Matt Hougan, Chief Investment Officer of Bitwise, a crypto asset manager, is predicting that the launch of spot Ethereum ETFs will push ETH to record highs, potentially even surpassing $5,000.
Why is Hougan so bullish on Ethereum ETFs?
He points to several key factors:
Ethereum’s Unique Advantages
- Lower Inflation: Ethereum’s inflation rate is currently 0%, compared to Bitcoin’s 1.7% when Bitcoin ETFs launched. This means there’s less pressure on the price due to new coins entering the market.
- Staking Advantage: Unlike Bitcoin miners, who often sell their mined coins to cover costs, Ethereum stakers are less likely to sell their ETH. This is because they earn rewards for staking, and they don’t have the same high operating costs as miners.
- Scarcity: A significant portion of ETH is currently locked up in staking and smart contracts, making it unavailable for sale. This scarcity could further drive up the price.
What about the potential for volatility?
Hougan acknowledges that the initial weeks after the ETF launch could be volatile, especially as funds potentially flow out of the existing Grayscale Ethereum Trust (ETHE). However, he believes that the market will stabilize in the long term, ultimately pushing ETH to new highs.
Looking at the big picture, Hougan expects Ethereum ETFs to be a major success, potentially attracting $15 billion in new assets within the first 18 months.
He believes that the combination of these factors makes it highly likely that ETH will challenge its previous all-time high.
It’s an exciting time for Ethereum, and the launch of ETFs could be a major catalyst for growth. /p>
