Ethereum
Bitwise CIO expects $15 billion to be invested in Ethereum spot ETFs. How will ETH react? —TradingView News
Bitwise Chief Investment Officer (CIO) Matt Hougan recently discussed the inflows that US Spot Ethereum ETFs could attract. Specifically, it outlined how much money could be injected into these funds during their first 18 months of trading.
Spot Ethereum ETFs to Record $15 Billion in First 18 Months of Trading
Hougan mentioned in a note to investors that Spot Ethereum ETFs could see $15 billion in net inflows in their first 18 months of trading. He explained how he arrived at these numbers to show that it wasn’t just a guess. First, Hougan pointed to the market caps of Bitcoin and Ethereum and said he expects investors to allocate to their respective exchange-traded products (ETPs) in proportion to their market caps.
Hougan noted that U.S. investors have, so far, invested $56 billion in Spot Bitcoin ETPs and expect that figure to reach $100 billion or more by the end of 2025, when these Funds should have matured further and been approved on platforms like Morgan Stanley and Merrill. Lynch.
Using that as a benchmark, Bitwise’s CIO said Spot Ethereum ETFs would need to attract $35 billion in assets to stay on par with Bitcoin ETFs, which he estimated could take around 18 months. Hougan also highlighted that Spot Ethereum ETFs will already have $10 billion in assets at launch, thanks to the Grayscale Ethereum Trust (ETHE), which will be converted into an ETF on launch day.
Therefore, Hougan noted that Spot Ethereum ETFs now have $25 billion in inflows to reach parity with the amount of inflows Spot Bitcoin ETFs are expected to reach by the end of 2025. Hougan noted then highlighted data from international ETP markets to show that investors can allocate to Bitcoin and Ethereum ETPs roughly in line with their market capitalization.
Using international markets as a reference point
According to Hougan, Bitcoin and Ethereum ETPs in Europe hold €4,601 and €1,305 in assets under management (AuM), which corresponds to 78% and 22% of the total funds available in the two markets. Similarly, Bitcoin and Ethereum ETPs in Canada are worth CAD$4,942 (77%) and CAD$1,475 (23%), respectively.
Working with the market share of Ethereum ETPs in Canada, Hougan estimated that US Spot Ethereum ETFs could also get 22% of the US market. Based on this, Hougan lowered the net inflow estimate for Spot Ethereum ETFs from $25 billion to $18 billion, excluding Grayscale assets.
Hougan ultimately lowered the estimated net inflows to $15 billion taking into account that a significant portion of flows into US Spot Bitcoin ETFs are related to carry trades. He withdrew $10 billion in carry trade-related assets under management from the Bitcoin market, lowering his estimates for Bitcoin from $100 billion to $90 billion and for Spot Ethereum ETFs from $18 billion to $15 billion. dollars.