Many ETH holders, including myself, often give ourselves a mental massage saying, 'Don't forget, the only assets available through ETFs are BTC and ETH.' And everyone has seen the power of BTC after ETH, so there is always hope for ETH. However, at the same time, everyone is puzzled as to why the performance of ETH ETF is so much worse than BTC after its approval. I believe there are mainly two reasons.
1. This reason has been discussed extensively. The selling pressure from Grayscale has been continuous, and other issuers can't keep up. BTC just passed but has also faced Grayscale selling pressure, which quickly adjusted, while ETH has been bleeding out continuously. Many people have been waiting for Grayscale to finish selling before making a move, but they have been waiting for a long time. However, after talking with many friends and analyzing this period, I feel this issue is just a surface phenomenon.
2. The significant selling pressure from Grayscale, along with the weak purchasing power of ETH, is a deeper issue. If we view this from the perspective of various ETF issuer fund managers, I believe the current situation is that they have no motivation and have not exerted any effort to allocate resources to promote ETH ETF in the market and to clients, resulting in Grayscale holders constantly selling while clients of other issuers have not generated sufficient purchasing volume.
BTC has super influencers like Trump and Musk, and Microsoft is about to join in, so BTC has strong external forces to sufficiently educate the market and push funds forward. As ETF issuers, they achieve more with less effort; Musk and Trump help them act as client managers to complete adequate market education, while Microsoft helps elevate their status, increasing emotions and funding. ETF issuers just need to find ways to 'attract deposits.'
However, the ETH through ETFs does not have such external forces compared to BTC; there is no super influencer and no major backer. If you were a fund manager facing such a situation, would you feel excited and eager to expand your territory, or would you feel frustrated thinking, 'Am I being set up by my boss, sent here to toil away?'
Popularizing Ethereum (ETH) is challenging.
The same logic applies: if you were introducing BTC ETF to American moms, you wouldn't need to say much; Elon Musk and Trump have already paved the way for you. But if you were introducing ETH ETF to American moms: 'So, there's this thing called Ethereum, you may not have heard of it, but it's incredible. It's an L1, but there are a bunch of L2s. Don't worry about the difference between 1 and 2 right now. You know about DeFi, right? It runs on that. This thing is really impressive. Wait, don’t leave yet, there's something called ZK that's even more amazing; I haven't finished!' If you were the fund manager for the ETH ETF, while next door a crowd of American moms is rushing to buy BTC, you would have to first sit them down with a thick manual for education. What would you do? Currently, the vast majority of people, including my parents, know about BTC, but very few know about ETH. If you lack sufficient understanding of an asset, you certainly wouldn't rashly purchase it.
If you were the CEO of an ETF issuer, facing a situation where there is still a lot of hot money in the market with a strong purchasing desire, would you choose to seize the moment and continue to aggressively attract more clients who want to invest in the crypto space to buy BTC, or would you spend time educating the market to guide them towards ETH? If your company has a marketing budget of $1 million this year, how do you plan to allocate funds to the BTC and ETH ETFs?
So the current situation is as follows: although the only two ETFs available are BTC and ETH, BTC is thriving and easy to nurture, while ETH requires a lot more effort to grow. This ultimately leads to the situation where, even though ETH has also gone through the ETF process, it hasn't received enough resource allocation for market education, resulting in insufficient purchasing volume.
Of course, I am not saying that ETH itself is bad, nor am I Fudding ETH. Please note that the discussion in this article is limited to the current situation comparing BTC and ETH ETFs. If after reading this article you feel uncomfortable and have more reasonable arguments and information, feel free to supplement and discuss in the comments. But if you can't come up with anything useful and just want to criticize me, please save your time and just block me.
So when might this situation be reversed, allowing various issuers to start allocating resources to ETH?
First, we definitely need to wait until the market funds for BTC have been mostly snatched up by various parties. Once they realize they can’t move it anymore, and the low-hanging fruits are picked, they will have to venture into ETH for expansion. Although it is more difficult to develop business compared to BTC, it is still an incremental market.
Secondly, ETH ETF allows staking, giving various ETFs a stronger incentive to conduct market education and attract deposits. To be honest, even if Sol, Sui, and other public chains go through ETFs, I believe they face a similar situation as ETH. In the absence of super influencers and major backers, market education is still very lacking, and promoting ETFs is quite challenging. I even think that if Dogecoin went through ETF, its capital purchase volume would far exceed the public chain ETFs; this is definitely not a joke.
The article ends here. If you are interested in me, you can click on my homepage and let’s seize this bull market together.
