Ethereum ETFs May See Lower-than-Expected Demand, Two Research Firms Predict

Initial demand for spot ether ETFs may be lower than anticipated, Wintermute and Kaiko predict.

Wintermute sees about 62% fewer inflows next year than bitcoin ETFs received in six months.

Some prominent crypto firms see a relatively muted debut of exchange-traded funds that hold Ethereum's {{ETH}} ether.

Wintermute, a major market maker, predicts that Ethereum ETFs will collect a maximum of $$ 4 billion in investor inflows next year. That's below the $$ 4.5 billion to $$ 6.5 billion expected by most analysts — and that last number is already about 62% lower than the $$ 17 billion that bitcoin ETFs have raised so far since they began trading in the U.S. , six months ago.

Wintermute, however, sees the price of Ether rising by as much as 24% over the next 12 months, driven by these inflows.

Eight potential issuers are set to list their products in the US as early as Tuesday, including BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Bitwise, 21Shares and Invesco, after submitting their final documents last week.

US regulators refused issuers' request to allow Ether ETFs to stake the cryptocurrencies they hold, which would have generated revenues that could have been shared with investors. “This loss reduces the competitiveness of ETH ETFs compared to direct holdings, where investors can still benefit from staking,” Wintermute said in his report.

Research firm Kaiko shares a similar perspective based on previous Ethereum-focused launches.

“The launch of futures-based ETH ETFs in the US late last year was met with lower-than-expected demand,” Will Cai, head of indexes at Kaiko, said in a report. “