Bitwise Forecasts a $15 Billion Inflow in Ethereum ETFs, Approval Hopes Rise
Bitwise Asset Management has asserted that if the United States Securities and Exchange Commission (SEC) approves Ethereum-based exchange-traded funds (ETFs), they may see an enormous inflow of $15 billion.
This prediction coincides with the rising hope that Ethereum ETF regulations would soon be approved, according to Bitwise, the Ethereum ETF approval would be a huge step forward for the sector, comparable to the launch of Bitcoin ETFs.
“The approval of Ethereum ETFs by the SEC would likely trigger a significant influx of capital into the market,” said Bitwise’s chief investment officer, Matt Hougan. The company predicted that during the first year, these inflows might amount to $15 billion, driven by institutional and retail investors looking for diversified Ethereum exposure.
Investor’s Interest Expected to Reflect in Ethereum’s Market Capitalization
The clearance process for cryptocurrency ETFs has been drawn out and complicated by regulatory obstacles. Concerns about market manipulation, custody disputes, and the general volatility of cryptocurrency markets have all had an impact on the SEC’s cautious stance.
Speaking positively about the evolving regulatory landscape, Hougan said, “The SEC’s approval of Bitcoin ETFs was a landmark decision.” He added that the regulator’s readiness to interact with businesses and resolve important issues eventually results in Ethereum ETF approval.
Strict regulatory oversight is anticipated, and the SEC will probably require strong steps to guarantee investor protection and reduce the dangers related to market manipulation. It is expected that the investor’s allocation in Ethereum will reflect its market capitalization.
Hougan had hinted that the presence of Bitcoin has dominated the market by 74% market capitalization, in contrast to Ethereum’s 26% which (according to Hougan) is an important factor for predicting cash flow patterns in the ETFs.
Ethereum ETF May Likely Amass $35 Billion by 2025, Hougan Predicts
Meanwhile, BloFin, a popular cryptocurrency exchange, believes that the expected launch of the spot Ethereum ETF in the United States will trigger a temporary increase in the price of ETH. Data from CryptoSlate published on June 26 says that investors will likely shift their focus from Bitcoin to Ethereum pending when the rave will naturally subside.
The development is compared to the Canadian and European ETP markets, where the Ethereum ETF products have seen an amount of assets comparable to the market capitalization. Hougan added that there has been an emergence of similar cashflow patterns witnessed in the United States.
This has driven substantial cash inflow for the Ethereum ETF investment vehicle. The Bitwise boss further acknowledged that the Ethereum ETPs should match the growth success of Bitcoin. He predicted that there would be a possible amassing of about $35 billion by 2025 should things go as planned.
He also stated that Grayscale’s plan to convert its $10 billion Ethereum Trust into an ETF will be a major part of the catalyst for its success. BloFin also revealed that ETH whales have pulled back their selling pressure, while the BTC holders have continued to reduce their holdings. The company has also linked the trend to BTC miners selling their assets for cash.
Industry Experts Expect More From Ethereum ETF, Makes Comparison
James Seyffart, an ETF analyst, in his comments, says that the funds may probably attract fewer investors as compared to their Bitcoin counterparts. Seyffart asserted that the disparity between the Ethereum and Bitcoin market capitalization has structured Ethereum at a disadvantage hence, making the Ethereum ETFs almost impossible to attract as many investors as Bitcoin.
There’s still much expectation from the Ethereum ETF to raise a major rave like its counterpart, although most industry experts believe it won’t have as much impacting influence as Bitcoin. Seyffart estimated that the Ethereum ETF may only pull between 20%-25% of Bitcoin ETFs.
Seyffart also pointed out Ethereum ETF’s inability to take full advantage of the Ethereum blockchain. He noted that ETFs don’t offer investors direct ownership to be part of NFTs and DeFi unlike what applies to direct ownerships.
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