Launch of spot ether ETFs in the U.S. will push the price of the crypto to all-time highs above $5,000, the report said.
Bitwise said money flowing into new ether spot ETFs will have a larger impact than it did for bitcoin.
Ether spot ETFs are expected to draw in $15 billion of net inflows in the first 18 months.
The launch of spot ether {{ETH}} exchange-traded funds (ETFs) in the U.S., expected to occur next week, will push the price of the second largest cryptocurrency to all-time highs above $5,000, Bitwise said.
It may not happen immediately and price action may be choppy to start, due to money flowing out of the $11 billion Grayscale Ethereum Trust (ETHE), after it converts to an ETF, chief investment officer Matt Hougan wrote in a report on Tuesday.
Still, “by year-end, I'm confident the new highs will be in,” Hougan wrote, “and if flows are stronger than many market commentators expect, the price could be much higher still.”
Bitwise notes that bitcoin {{BTC}} has risen about 25% since the launch of spot ETFs in the U.S. in January, and more than 110% since the market began pricing in a potential launch in October last year.
The money flowing into new ether spot ETFs will have a larger impact than it did for bitcoin for three structural reasons, Bitwise said. Ether’s short-term inflation rate is 0% and when bitcoin versions launched the network’s inflation rate was 1.7%, so there is significant demand meeting zero supply. Unlike bitcoin miners ETH stakers don’t have to sell, and 28% of ETH is staked and therefore off the market.
Ether spot ETFs are expected to be a success and garner $15 billion of net inflows in their first 18 months of trading, the report added.
Steno Research expressed a similarly bullish outlook for the cryptocurrency in a report last month. It predicted that ether would reach at least $6,500 later this year due to expected inflows to spot ETFs, plus additional tailwinds.
Read more: Ether Spot ETFs Could See Up to $5.4B of Net Inflows in First 6 Months: Citi
