- K33 Research predicts strong investment interest in Ethereum ETFs at launch.
- Expected inflows by K33 Research: $3.1 billion to $4.8 billion within 5 months.
- Balchunas forecasts lower inflows: $1.4 billion to $2.8 billion.
- K33 Research's optimism is based on Bitcoin ETFs' success, which have attracted around $14.8 billion.
- Despite varying figures, both K33 Research and Balchunas anticipate a highly positive response for Ethereum.
In late May, the U.S. approved several Ethereum ETFs, marking a significant milestone for the cryptocurrency market. However, the full impact of these new financial instruments is yet to be felt, as none of the eight approved applications have received the complete go-ahead for trading to commence. Despite this, K33 Research anticipates that these ETFs will have a massive impact upon launch.
This article will delve into K33 Research's projections for the Ethereum ETFs and their potential implications for Ethereum and the broader crypto market.
K33 Research's Outlook
According to data from Farside, spot Bitcoin ETFs are currently performing exceptionally well. On June 4, these ETFs experienced their second-best net inflow day, with a combined total of $886.6 million. Fidelity’s FBTC fund led the way with an inflow of $378.7 million, followed by BlackRock’s IBIT at $274.4 million, and Ark 21 Shares. These figures represent the highest net inflows since March 12, just before Bitcoin reached its all-time high of $73,800, when ETFs saw an inflow of $1.04 billion.
K33 Research suggests that a similar trend could be expected for Ethereum ETFs. Their prediction is based on the relative global assets under management (AUM) market share between Ethereum and Bitcoin. Currently, Ethereum's market share stands at around 28% of Bitcoin’s. Based on this ratio, K33 forecasts that Ethereum ETFs could attract approximately $4 billion in inflows within the first six months of their launch.
Correlation to Bitcoin ETFs
Farside data reveals that U.S. spot Bitcoin ETFs have accumulated around $14.8 billion so far, now holding over 1 million Bitcoin, which accounts for about 5% of the total Bitcoin supply. Drawing a parallel, K33 Research notes that institutional funds currently control 3.3% of Ethereum’s circulating supply. They predict that Ethereum ETFs will gather between $3.1 billion and $4.8 billion post-launch, translating to about 750,000 to 1 million ETH, or 0.65% to 0.85% of Ethereum's current supply.
Additionally, the Ethereum CME futures market, currently at 22.9% the size of Bitcoin’s, captured 34.6% of the inflows seen by Bitcoin futures ETFs between September 29 and December 26. This historical data provides further support for K33's optimistic outlook.
Bloomberg Analyst Eric Balchunas’ Perspective
Bloomberg ETF analyst Eric Balchunas has also shared his insights on the Ethereum ETFs. While K33 Research projects inflows of up to $4 billion, Balchunas is more conservative. In a recent tweet, he suggested that Ethereum ETFs might capture about 10% to 20% of the inflows seen by spot Bitcoin ETFs. This would still be significant, translating to around $1.4 billion to $2.8 billion in inflows.
Overall, regardless of differing estimates, analysts agree that the launch of Ethereum ETFs is a bullish event. The influx of capital into Ethereum could potentially drive its price higher, possibly even towards the $5,000 mark in the near future.
Disclaimer: Voice of Crypto aims to provide accurate and up-to-date information, but it is not responsible for any missing facts or inaccuracies. Cryptocurrencies are highly volatile financial assets, so please conduct your own research and make informed financial decisions.