According to CoinDesk, Ether spot exchange-traded funds (ETFs), anticipated to be approved for trading in the U.S. in the coming months, are projected to attract $15 billion of net inflows in their initial 18 months. This prediction was made by Bitwise's Chief Investment Officer, Matt Hougan, in a recent report.
The potential inflows can be gauged by comparing the relative market caps of bitcoin and ether. Currently, bitcoin accounts for 74% of the combined market value. It is expected that investors will allocate to bitcoin and ether ETFs in similar proportions.
Since their introduction in January, U.S. investors have invested $56 billion in spot bitcoin ETFs. This figure is expected to rise to $100 billion or more by the end of 2025 as large wirehouses approve these products for trading on their platforms. Using this $100 billion figure as a reference, spot ether ETPs would need to attract $35 billion in assets to reach parity, a process Hougan expects will take about 18 months.
The Grayscale Ethereum Trust (ETHE), which has $10 billion in assets under management (AUM), is expected to convert to a spot ETF, leaving $25 billion of inflows to reach parity. However, in Canada, ether ETPs account for only 22%-23% of total AUM, slightly underperforming their absolute market cap weight. This discrepancy can be attributed to bitcoin’s first-mover advantage.
The report suggests that some investors may have purchased a bitcoin ETP and stopped there, believing their crypto exposure was covered. This dynamic may also be true in the U.S. If ether ETFs only capture 22% of the market, as in Canada, the estimate of net new inflows would be reduced to $18 billion, with other factors further reducing this by $3 billion.