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Ether Price Poised for Supply 'Shock' as ETFs May Attract $4B Inflows in Five Months - K33 Research
Ethereum-based exchange-traded funds (ETF) that can directly hold ether (ETH) are soon arriving in the U.S. and could attract $4 billion of inflows in the first five months, crypto analytics firm K33 Research said in a report.
The company based its forecast by comparing the assets under management in existing ETH-based exchange-traded products around the globe to similar bitcoin (BTC) products and the amount of open interest (OI) in futures contracts on the Chicago Mercantile Exchange (CME), the go-to marketplace for institutional investors.
Ether's OI on CME currently stands at 23% of the size of BTC futures, but it has seen an average share of 35% of BTC futures since ETH futures started trading on CME in 2021, indicating significant institutional demand for ETH in the U.S., per K33.
Ether ETPs and CME futures open interest compared to bitcoin products (K33 Research)
Ether ETPs and CME futures open interest compared to bitcoin products (K33 Research)
Applying these ratios to the nearly $14 billion inflows so far into the spot BTC ETFs, K33 puts the estimated ETH ETF inflows between $3 billion and $4.8 billion within the first five months. This estimate is slightly higher than JPMorgan's $3 billion forecast for this year.
Read more: Ether Spot ETFs to See Much Lower Demand Than Bitcoin Versions, JPMorgan Says
Based on current prices, this would equal 800,000 to 1.26 million of ETH accumulated in the ETFs, or roughly 0.7%-1.05% of the total supply of tokens, creating a supply crunch for the asset, according to the report. Unlike futures-based products, the issuers of spot ETFs will need to buy tokens in the spot market as investors buy ETF shares.
"As seen in BTC, this monumental supply absorption shock should lead to price appreciation in ETH," said Vetle Lunde, senior analyst at K33 Research.
Bitcoin, after an initial correction in late January, rallied nearly 60% to record highs following the introduction of U.S. spot ETFs. K33 analysts predicted that with the start of ether ETFs, the price of ETH would start outperforming BTC after almost two and a half years of the ETH-BTC pair's downtrend.
Last month, the U.S. Securities and Exchange Commission (SEC) approved key filings for spot ETH ETFs in a move that surprised most market participants. This move paved the way for greenlighting the funds to trade in the U.S. After working through the necessary documentation, market observers expect the ETFs to start trading as soon as late June or early July, the K33 report said.
Notably, applicants deleted the parts of their filings that would have allowed staking the assets in the fund, likely to appease the regulator.
K33 said that the omission of staking would not negatively impact inflows to the ETFs, contradicting JPMorgan's stance, as 99% of assets under management in Canadian ETH ETFs and 98% of European products are held in funds without staking.
$ETH $BTC $BNB
#BnbAth already! So, next one is #EthAth
The company based its forecast by comparing the assets under management in existing ETH-based exchange-traded products around the globe to similar bitcoin (BTC) products and the amount of open interest (OI) in futures contracts on the Chicago Mercantile Exchange (CME), the go-to marketplace for institutional investors.
Ether's OI on CME currently stands at 23% of the size of BTC futures, but it has seen an average share of 35% of BTC futures since ETH futures started trading on CME in 2021, indicating significant institutional demand for ETH in the U.S., per K33.
Ether ETPs and CME futures open interest compared to bitcoin products (K33 Research)
Ether ETPs and CME futures open interest compared to bitcoin products (K33 Research)
Applying these ratios to the nearly $14 billion inflows so far into the spot BTC ETFs, K33 puts the estimated ETH ETF inflows between $3 billion and $4.8 billion within the first five months. This estimate is slightly higher than JPMorgan's $3 billion forecast for this year.
Read more: Ether Spot ETFs to See Much Lower Demand Than Bitcoin Versions, JPMorgan Says
Based on current prices, this would equal 800,000 to 1.26 million of ETH accumulated in the ETFs, or roughly 0.7%-1.05% of the total supply of tokens, creating a supply crunch for the asset, according to the report. Unlike futures-based products, the issuers of spot ETFs will need to buy tokens in the spot market as investors buy ETF shares.
"As seen in BTC, this monumental supply absorption shock should lead to price appreciation in ETH," said Vetle Lunde, senior analyst at K33 Research.
Bitcoin, after an initial correction in late January, rallied nearly 60% to record highs following the introduction of U.S. spot ETFs. K33 analysts predicted that with the start of ether ETFs, the price of ETH would start outperforming BTC after almost two and a half years of the ETH-BTC pair's downtrend.
Last month, the U.S. Securities and Exchange Commission (SEC) approved key filings for spot ETH ETFs in a move that surprised most market participants. This move paved the way for greenlighting the funds to trade in the U.S. After working through the necessary documentation, market observers expect the ETFs to start trading as soon as late June or early July, the K33 report said.
Notably, applicants deleted the parts of their filings that would have allowed staking the assets in the fund, likely to appease the regulator.
K33 said that the omission of staking would not negatively impact inflows to the ETFs, contradicting JPMorgan's stance, as 99% of assets under management in Canadian ETH ETFs and 98% of European products are held in funds without staking.
$ETH $BTC $BNB
#BnbAth already! So, next one is #EthAth
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$ETH Etherium pierced the upper price tag in our previous analysis :) In the current daily view picture, you can see the resistance and trendline intersection prices above and the support and falling trend prices below. BTC is doing very well and can be expected to make Ath. You can review it in my Bitcoin article. It is highly likely that it will hit the upper price target today, and even if BtcAth happens, it is quite possible for ETH to make a new #EthAth . If you look at yesterday's candle structure, it would be quite normal for it to retreat to the retest zone at the bottom and move up again. You need to be careful at such times because it may make sharp downward movements to get liquidation before the big upward movement. If you manage your account correctly, you will make good profitsโฆ Good luckโฆ
$ETH $BTC
$ETH $BTC
Will $ETH reach 5000? ๐ฒ๐ฅ
โ A RARE bullish signal occurred on a weekly chart. โ
Whenever we see a StochRSI cross on the weekly chart there is a huge bullish expansion soon. ๐๐๐
On average ETH pumps 110% percent from these events
If this was to repeat again (it happened 6/6) times before, we can see not 5000... BUT 6000 ETH in the coming weeks.
This summer is going to be a good one!!! ๐
$PEPE $SHIB #ETHETFS #btc70k #ETH_Market_Update #EthAth
โ A RARE bullish signal occurred on a weekly chart. โ
Whenever we see a StochRSI cross on the weekly chart there is a huge bullish expansion soon. ๐๐๐
On average ETH pumps 110% percent from these events
If this was to repeat again (it happened 6/6) times before, we can see not 5000... BUT 6000 ETH in the coming weeks.
This summer is going to be a good one!!! ๐
$PEPE $SHIB #ETHETFS #btc70k #ETH_Market_Update #EthAth
