Following the news of the Ethereum spot ETF approval, Bloomberg Intelligence ETF analyst Eric Balchunas lowered his expectations. Balchunas said he expects the Ethereum ETF to have only 10-15% of the assets of the Bitcoin ETF.
Institutional interest in Ethereum remains low
A series of signs show that institutional investors are far less interested in Ethereum than Bitcoin. Noelle Acheson, former head of market insights and researcher at Genesis Global Trading, said that the assets managed by the largest Ethereum futures ETF (EETH) are only 4% of the assets managed by the largest Bitcoin futures ETF (BITO). This shows that the acceptance of Ethereum products is completely different.
In January, a large number of institutional investors poured in after the spot Bitcoin ETF was approved, pushing the price of Bitcoin to a new high. According to analyst Hildobby, institutional investors bought more than $12 billion worth of Bitcoin after the ETF was approved. Ethereum investors may not get the same interest boost.
Acheson noted that Ethereum’s regulatory status remains unclear. Although Ethereum is mentioned as a commodity in the lawsuit, the SEC has yet to clearly define it, making investing in the asset more complicated.
Analyst insights and market updates
Previously, Balchunas and his colleague James Seyffart raised the likelihood of an Ethereum spot ETF being approved to 75% due to the U.S.’s support for cryptocurrency development. However, Balchunas expects the launch of an Ethereum ETF to be disappointing compared to Bitcoin.
“If an ETH spot ETF eventually launches, we should prepare for disappointment,” Acheson wrote in her newsletter Crypto Is Macro. Acheson attributed this to the traditionally low interest in Ethereum products among institutions in the U.S. and abroad.
Relative market analysis
In Hong Kong, Ethereum accounts for less than 15% of the assets under management of spot ETFs; similarly, the interest of institutional investors has greatly weakened. In the U.S. market, investors can already invest in Ethereum futures ETFs, but investors have also shown a lack of enthusiasm.
“The leading ETH futures ETF (EETH) has about 4% of [assets under management] as the leading BTC futures ETF (BITO),” Acheson wrote, highlighting the stark contrast in investor interest between the two largest cryptocurrencies.
Future Outlook and Industry Sentiment
Some voices in the industry remain optimistic about the future of Ethereum. Investor Jim Bianco said that eliminating regulatory uncertainty around Ethereum proof of stake could bring in a lot of institutional investment.
In short, while the approval of the Ethereum spot ETF marks an important milestone on the regulatory front, the actual impact on institutional investment remains to be seen. Eric Balchunas of Bloomberg Intelligence and other analysts warn that Ethereum may not see the same surge as Bitcoin after its ETF is approved. As the market digests these new products, the broader impact on Ethereum and other altcoins will be apparent.
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