Ethereum
Why Ethereum ETFs will see inflows of $3.9 billion in the first 100 days – DL News
- Ethereum ETFs are about to hit the market, says CCData analyst.
- Releases of popular products could curb price increases.
Investors will invest $3.9 billion in US Ethereum spot exchange-traded funds in the first 100 days after launch.
This is according to Jacob Joseph, research analyst at cryptocurrency data company CCData.
“Paralleling the net flows of Bitcoin spot ETFs in the United States over their first 100 days, we estimate a potential inflow of $3.9 billion for Ethereum spot ETFs in the United States,” did he declare. DL News.
Joseph added that ETFs will make the world’s second-largest cryptocurrency more attractive to institutional investors and propel Ethereum to a new all-time high.
The comments come after Ethereum soared 23% since May 20 to $3,830, thanks to optimism from the Securities and Exchange Commission, which gave the green light to the first stage of the approval process.
After hearing rumors that the SEC would work with the candidates, Bloomberg Intelligence analyst Eric Balchunas changed his chances of approval from 25% to 75%.
When these rumors turned out to be true, people like the CEO of Galaxy Digital Mike Novogratz suggested the regulator’s about-face suggested a warming of crypto in Washington.
Whatever the reason, the move has sparked a wave of optimism among market watchers.
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Joe Lubin, co-founder of Ethereum and founder of crypto infrastructure company Consensys, said DL News expect a “deluge” of demand for Ether, which would lead to a supply crisis and drive up prices.
Institutions that have already had exposure to Bitcoin ETFs “will most likely want to diversify into this second approved ETF,” Lubin said.
Somewhere else, Lennix Laithe global commercial director of OKX, said DL News that institutional investors will invest $500 million in Ethereum ETFs in their first week of trading.
Although CCData’s Joseph shared his optimism, he warned that “Ethereum could face challenges due to capital outflows from the Grayscale Ethereum Trust, similar to the market behavior seen after the approval of spot Bitcoin ETFs.”
Following the launch of 10 spot Bitcoin ETFs in January, the Grayscale Bitcoin Trust saw over $17.7 billion in outflows, according to BitMEX research.
“With nearly $11.1 billion currently under management in the Grayscale Ethereum Trust, we could see similar outflows from this ETF upon approval, influencing market sentiment,” Joseph said.
“Overall, this effect will likely be short-lived, as demand for other ETF products is able to absorb selling pressure over time, as seen with spot Bitcoin ETFs.”
He said DL News that the US SEC’s recent agreement on ETFs could be fully approved and negotiated “within the next two months”.
Crypto market players
- Bitcoin is up 1.6% over the past 24 hours to trade at $69,050.
- Ethereum is down 0.5% at 3,770.
What we read
Eric Johansson is the editor-in-chief of DL News. Do you have any advice? Email to eric@dlnews.com.