Analysis: Will Spot Ethereum ETFs Live Up to Expectations?

 

Market Impact Comparison with Bitcoin ETFs

Analysts are split on whether Ethereum ETFs will replicate the market impact seen with Bitcoin ETFs, which led to a 58% surge in BTC’s price within nine weeks of launch.

• Ryan Lee, Bitget Research: Believes Ethereum ETFs will drive lower trading volumes compared to Bitcoin ETFs, estimating that ETH could capture about 2.5% of its market cap, potentially managing $11.55 billion in assets under management in a bullish scenario.

• Galaxy Research: Foresees slower inflows for Ethereum ETFs compared to Bitcoin, estimating around $5 billion in net inflows within the first five months of trading.

Bullish Price Predictions Post-ETF Launch

Despite varying expectations on market impact, bullish sentiments prevail regarding Ethereum’s price:

• Steno Research: Predicts ETH could reach $6,500 post-ETF launch, exceeding its previous all-time high by 33%.

• Standard Chartered: Offers a more optimistic outlook, suggesting ETF approval could bring up to $45 billion in inflows within the first year, potentially driving ETH’s price to $8,000 by the end of 2024.

• Jupiter Zheng, HashKey Capital: Expects a brief initial rally followed by a ‘sell-the-news’ event post-ETF launch.

Impact of Excluding Staking Rewards

An issue dampening excitement is the exclusion of staking rewards from ETF filings:

• Lee: Notes that ETFs omit staking rewards, which are attractive to crypto-savvy institutions due to benefits like inflation rewards and priority fees. Traditional institutions, restricted by regulations, can only access ETH exposure through ETFs without staking benefits.

Fee Waivers to Attract Institutional Investors

To lure institutional capital, ETF issuers like Franklin Templeton and VanEck have announced fee waivers:

• Franklin Templeton: Waives a 0.19% sponsor fee for the first $10 billion in assets for six months.

• VanEck: Waives a 0.20% sponsor fee for the initial $1.5 billion until 2025.

Delayed Launch Expectations

Despite delays, ETF launch predictions point towards mid-July, as per Nate Geraci of the ETF Institute.

Current Price Movement of ETH

As of the latest update, ETH has seen a 1.2% increase in the past 24 hours, trading at approximately [current ETH price].

In conclusion, while analysts remain divided on the immediate market impact of Ethereum ETFs compared to Bitcoin, bullish price forecasts post-ETF launch and fee waivers aim to attract institutional investors, despite the exclusion of staking rewards from ETF offerings.