Ethereum ETF vs Bitcoin ETF: What to Expect for ETH After Approval

With Ethereum exchange-traded funds (ETFs) set to launch in early July, the crypto community is buzzing with anticipation. Notable ETF analyst Eric Balchunas predicts spot Ethereum ETFs may go live by July 2, while Reuters suggests the US Securities and Exchange Commission (SEC) could approve them by July 4.

As the market gears up for these new funds, many expect Ethereum to mirror Bitcoin's reaction to its spot ETF launch earlier this year.

When Bitcoin ETFs debuted in January, they drew massive capital inflows, driving the price of BTC to new heights. Citi's analysis shows that net inflows into spot Bitcoin ETFs exceeded $13 billion between January 4 and May 20, pushing BTC to an all-time high of $73,750 by March 14. The bank found a 6% price increase for every $1 billion invested.

Applying similar market-cap-adjusted flows to Ethereum, Citi projects inflows of $3.8 billion to $4.5 billion, potentially boosting ETH’s price by 23-28%. This could elevate ETH from its current $3,450 to around $4,417 by November, though still below its all-time high of $4,891 from November 2021.

Some analysts, like Andrey Stoychev from Nexo, are even more bullish, forecasting ETH to hit $10,000 by year-end if ETFs launch successfully in both the USA and Asia.

The introduction of spot Ethereum ETFs could also influence staking activities. Matthew Sigel from VanEck suggests staking yields may rise as funds flow into ETFs, potentially reducing validators and compromising network security. Currently, Ethereum has 1.02 million validators with an effective balance of 32.95 million ETH.

However, not everyone agrees. CCData Research argues that staking remains more lucrative, pointing out that a hypothetical 1000 ETH investment in January 2023 would have missed out on $200,000 in gains if placed in an ETF rather than native staking.

Presently, 27.68% of Ethereum's total circulating supply of 120.18 million ETH is staked, reflecting continued confidence in staking rewards over ETF investments.
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