ETFs tracking Ethereum spot could attract over 1 million ETH in first 5 months
According to analysts at K33 Research, based on the $14 billion capital inflow into Bitcoin spot ETFs since their trading debut in January 2024, applying a similar ratio suggests these Ethereum spot ETFs could attract between $3.1 billion to $4.8 billion USD within their initial 5 months.
The forecast translates to an anticipated inflow of 800,000 ETH to 1.26 million ETH into these funds, accounting for approximately 0.7% to 1.05% of Ethereum's total circulating supply.
Forecasting net inflows into Ethereum ETFs in the first 5 months. Source: K33 Research
Analysts drew comparisons with the Bitcoin market to derive their estimates. Previously, only about 4.1% of BTC was held in investment funds since the previous peak in November 2021. However, the introduction of Bitcoin spot ETFs increased this ratio to 5.6%. Currently, 3.3% of Ethereum's total supply is held in investment funds, with similar growth expected upon the launch of Ethereum ETFs.
Some data analysis suggests that current demand for Ethereum investment products remains relatively subdued. Global Ethereum trading products manage only 28.2% of the asset's value compared to Bitcoin trading products. In Canada and Europe, this figure rises slightly to 33%. Moreover, in the US market, Ethereum futures ETFs account for only 5% compared to Bitcoin futures ETFs.
Comparing CME and ETP AUM indices between Ethereum and Bitcoin. Source: K33 Research
However, analysts Lunde and Zimmerman from K33 Research emphasized that this disparity does not accurately reflect actual Ethereum investment demand but rather timing differences in the introduction of these funds.
The analysis suggests:
"Evidence shows that open Ethereum contracts on the CME currently represent 22.9% compared to Bitcoin, with an average ratio of 35% since inception. This indicates strong institutional investment demand for Ethereum in the US. CME data demonstrates high investment demand in Ethereum from financial institutions, particularly in the US."
Analysts also believe that figures like Larry Fink and asset management firm BlackRock, with their 'Midas touch', could catalyze upcoming Ethereum ETFs, akin to how their Bitcoin spot ETFs generated a record inflow streak over 71 consecutive days.
The advent of Ethereum spot ETFs could potentially drive ETH prices higher, based on the demonstrated correlation between capital inflows into Bitcoin ETFs and BTC achieving new ATHs just prior to its fourth halving event.
As reported by Coin68 on May 23rd, the SEC approved a 19b-4 filing for 8 Ethereum spot ETFs. However, it will take several weeks to months for issuers to update S-1 filings and await SEC approval before trading can commence.
According to Kaiko, Grayscale's ETHE Ethereum spot ETFs could witness withdrawals totaling $3 billion USD in their first month. Meanwhile, MicroStrategy founder Michael Saylor has changed his perspective, suggesting that the launch of Ethereum spot ETFs will benefit not only Ethereum but also Bitcoin and the overall crypto market.
