Written by Matt Hougan, Chief Investment Officer at Bitwise

Compiled by: Luffy, Foresight News

In last week’s investment memo, I predicted that Ethereum ETPs would bring in $15 billion in net inflows by the end of 2025. This would be a huge achievement and would make Ethereum ETPs one of the most successful ETPs of all time.

However, Ethereum ETPs still cannot compare to Bitcoin ETPs, which have attracted $14 billion in net inflows less than six months after listing. I expect this number to soar to over $50 billion by the end of 2025 as financial giants such as Morgan Stanley and Merrill Lynch join in.

Bitcoin is three times the size of Ethereum in terms of market cap, so it makes sense that Bitcoin ETPs would attract three times as much capital as Ethereum ETPs.

But something has stuck with me since I wrote that memo. If things had gone another way, the Ethereum ETP could have performed far better than I expected.

Here are the reasons.

Ethereum is like a high-growth tech stock

Naive investors (and parts of the media) lump Bitcoin and Ethereum together. It’s easy to understand why: they are the two largest crypto assets. But our readers should know that they are fundamentally different, just like gold and oil.

Bitcoin is designed to be a new type of monetary asset. It is intended to compete with gold, the dollar, and other fiat currencies as a store of value and, ultimately, a medium of exchange.

This is an exciting space. The gold market is worth over $10 trillion, and the “currency” market is the largest market in the world. If Bitcoin successfully enters these markets, its value will still increase by 10 times or more.

Ethereum is something completely different. Ethereum is structured as a technology platform: it is a fully programmable blockchain that is the foundation for new crypto applications such as tokenization, stablecoins, and decentralized finance.

The economics of Ethereum are simple: all else being equal, as more people use these applications, the value of ETH, the Ethereum blockchain’s asset, grows. Because you have to pay ETH to use the platform.

Leading blockchain use cases. Source: Bitwise Asset Management

Why Ethereum ETPs are outperforming expectations

This is why I suspect that the performance of Ethereum ETPs may be expected. After all, investors love technology stocks. Almost all investors have invested in high-growth technology stocks such as Nvidia and Meta, while relatively few investors have invested in monetary assets such as gold.

Imagine if investors sold a small amount of tech stocks and increased their holdings of ETH, what would happen? I think investors prefer to hold tech assets like Ethereum rather than investing in a new monetary asset.

Therefore, we need to get mainstream attention for the core idea of ​​Ethereum (that ETH is a technology investment). To do this, we need to accomplish two things: 1) more people need to understand how Ethereum is different from Bitcoin; 2) some applications built on Ethereum need to gain mainstream attention.

What would that look like? Imagine stablecoin assets growing from $160 billion to $1.6 trillion as more people embrace the speed and transparency of blockchain payments; or DeFi opening up new lending channels as regulatory clarity emerges; or more companies following BlackRock’s lead and building tokenized funds on Ethereum.

Maybe investors need a new ETF that’s 10% ETH and 90% tech stocks.