Citi predicts: Ethereum spot ETF will see huge inflows if approved
A research report recently released by Citi showed that the U.S. Ethereum spot ETF may see net inflows of up to $5.4 billion in the first six months after its launch. The forecast has attracted widespread attention, especially after the Securities and Exchange Commission (SEC) approved applications submitted by multiple issuers for the ETFs, which are expected to begin trading next week.
According to a report from Citi, the level of inflows into the Ethereum spot ETF is expected to be only 30%-35% of the Bitcoin (BTC) spot ETF, which means that the net inflow range in the next six months is between $4.7 billion and $5.4 billion. . However, Citi also noted that Ethereum returns may be lower than expected relative to the beta of these inflows.
A team led by Citi analyst Alex Saunders wrote in the report: “While Ethereum may offer diversification benefits in the long term as it has different and broader use cases, this is currently underrepresented. ” This means that investors may not entirely view Ethereum as a unique asset, but rather have similar characteristics to Bitcoin, and may allocate their investments between the two.
Market prospects and challenges coexist
Citi also noted that another factor that could impact inflows is the lack of staking functionality in the Ethereum spot ETF. Bitcoin, by contrast, has benefited from its first-mover advantage, attracting billions of dollars in inflows and showing strong growth ahead of the approval of the Ethereum ETF.
Nonetheless, the Citi report also emphasized that the situation is not entirely doom and gloom. The timing of the Ethereum spot ETF listing could coincide with the U.S. Federal Reserve’s gradual shift toward dovish policy, which could mean lower interest rates, stronger stocks, and a weaker U.S. dollar, a move that could support cryptocurrencies The overall economic environment of the market.
In addition, Citi believes that although the capital inflows of Ethereum spot ETFs may not be as high as those of Bitcoin, its diverse and broad application scenarios still have the potential to attract significant investment in the long term. Especially in the blockchain technology and DeFi industry, the application of Ethereum is constantly expanding its functions, which will help improve its market position.
Overall, Citi’s forecasts provide investors with a comprehensive view of the Ethereum spot ETF market outlook. Despite the short-term challenges, Ethereum spot ETFs may still become a focus for investors as the market matures and the general economic environment changes.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
