Bitwise Asset Management Chief Investment Officer (CIO) Matt Hougan expects spot Ethereum exchange-traded funds (ETFs) to attract billions of dollars in inflows within months of receiving U.S. Securities and Exchange Commission (SEC) approval. ).
In a new note to investors, Hougang says he expects at least $15 billion in net inflows into the ETH ETF in the first year and a half.
“Everyone wants to know how much spot Ether exchange-traded products (ETPs) will attract in net flows. My answer: $15 billion in the first 18 months.”
Hougan says his assessment is based on ETH's market capitalization compared to Bitcoin, how similar products have performed in other markets such as the UK and Canada, and the impact of the carry trade strategy.
A carry trade strategy involves market participants buying spot Bitcoin ETFs/ETPs (BTC) and subsequently selling Bitcoin futures contracts to capture the difference.
Bitwise CIO adds:
“On the other hand, my assessment does not take into account the many tailwinds behind Ethereum's growth, including the rise of stablecoins, increasing regulatory transparency, and the impact of the recent Dencun blockchain upgrade, which dramatically reduced transaction costs on Ethereum. A strong bull market for ETH as an asset will significantly increase demand.
However, I think $15 billion over the next 18 months is a good starting point. My instinct tells me that we will achieve more; ETH is an attractive asset that underpins the world's most versatile blockchain. But even $15 billion in net new demand would have a dramatic impact on the Ethereum market.”
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