Editor | Wu talks about blockchain
On July 22, the U.S. SEC officially approved the S-1 applications of multiple ETF issuers. The Ethereum spot ETF was officially approved for listing and trading, and trading began at 9:30 a.m. Eastern Time on July 23.
According to Bloomberg ETF analyst Eric Balchunas, the spot ETH ETF group had a trading volume of $112 million in the first 15 minutes after it started trading, which is a huge volume compared to the issuance of ordinary ETFs, but only half of the first-day trading volume of the BTC ETF group (excluding GBTC), but it still exceeded expectations. In the first 15 minutes, Grayscale ETHE had a trading volume of $39.7 million, Bitwise ETHW had a trading volume of $25.5 million, BlackRock ETHA had a trading volume of $22.5 million, Fidelity FETH had a trading volume of $15.2 million, etc.
Wintermute, a large market maker, expects Ethereum ETFs to receive a maximum of $4 billion in inflows from investors over the next year. That’s lower than the $4.5 billion to $6.5 billion most analysts were expecting, and about 62% less than the $17 billion that Bitcoin ETFs have raised so far since they began trading in the U.S. six months ago. Wintermute does expect Ether’s price to rise 24% over the next 12 months, driven by those inflows.
Daniel Yan, founder of Kryptanium Capital and co-founder of Matrixport, tweeted about the ETH ETF: I still hold the contrarian view that ETH/BTC will actually go lower rather than higher in the coming weeks. Reasons include: people buy when rumors spread and sell when facts are revealed; net flows may be negative. It is expected that ETH/BTC will fall below 0.05 and stabilize between 0.0475 and 0.05.
U.S. regulators have rejected a request from issuers to allow Ethereum ETFs to collateralize their cryptocurrency holdings. “This loss reduces the competitiveness of ETH ETFs compared to direct holdings, as investors can still benefit from staking,” Wintermute said in its report.
Will Cai, director of Kaiko Index, said in a report: At the end of last year, the United States launched a futures-based ETH ETF, but the demand was not ideal. All eyes are on the launch of the ETF spot, with high hopes for rapid accumulation of assets. Regardless of the long-term trend, the price of Ethereum may be "sensitive" to the amount of inflows in the first few days of trading. Implied volatility shows a lack of confidence in the launch of the ETH ETF.
Citibank reported that the net inflow of Ethereum spot ETFs could be equivalent to 30%-35% of Bitcoin ETFs, which means that the potential net inflow of Ethereum ETFs will reach US$4.7 billion to US$5.4 billion within six months. However, due to the lack of pledge and Bitcoin's first-mover advantage, the flow of funds may be insufficient.
Grayscale says nearly a quarter (25%) of potential (US) voters would be more interested in investing in Ethereum if an Ethereum (spot) ETF is approved.
Matt Hougan, chief investment officer of Bitwise, said that the U.S. spot Ethereum ETF could attract $15 billion worth of net inflows in the first 18 months after listing. He expects investors to allocate roughly according to the market capitalization of Bitcoin and Ethereum ETFs ($1.2 trillion and $405 billion), that is, to provide about 75% weighting for the spot Bitcoin ETF and about 25% weighting for the Ethereum ETF. Currently, assets managed through spot Bitcoin ETFs exceed $50 billion, and Hougan expects that by the end of 2025, this figure will reach at least $100 billion.
Crypto analytics firm K33 Research estimates that the spot ETH ETF, which is about to be launched in the United States, will have an estimated inflow of $3 billion to $4.8 billion in the first five months, which would be equivalent to 800,000 to 1.26 million ETH accumulated in the ETF based on current prices, accounting for approximately 0.7%-1.05% of the total token supply. K33 Research analyst Vetle Lunde said that this supply absorption shock should lead to an increase in ETH prices. In addition, K33 believes that the omission of staking will not have a negative impact on the inflow of funds into the ETF. Previously, JPMorgan Chase's forecast for inflows into the ETH ETF this year was $3 billion, and believed that the omission of staking would affect inflows.
According to a Bernstein report, the total Bitcoin and Ethereum ETF market is expected to grow to $450 billion, indicating that more than $100 billion will flow into crypto ETFs in the next two years. Previously, the broker predicted that the high point of the Bitcoin cycle in 2025 would be $150,000, with a target price of $90,000 by the end of the year. In addition, the report stated that Ethereum is the first PoS token approved as a spot ETF, which has a positive impact on other blockchain tokens, and Solana (SOL) may benefit.
Bernstein analysts Gautam Chhugani and Mahika Sapra estimate that the approval of a spot Ethereum ETF will drive Ethereum prices up 75% to $6,600. They pointed out that the SEC approved a similar Bitcoin product in January, spurring a 75% increase in Bitcoin prices in the following weeks, and similar changes are expected in ETH's price trend. However, Kaiko analyst Adam McCarthy believes that there is not much demand for the Hong Kong ETH ETF and it has experienced several days of net outflows. The lack of collateral is also an important factor and may further affect demand.
Geoffrey Kendrick, an analyst at Standard Chartered Bank, said that cryptocurrency ETFs such as SOL and XRP may be approved in 2025. He believes that the approval of the ETH ETF means that ETH and similar cryptocurrencies will not be classified as securities. In addition, it is expected that the ETH ETF may bring in $15 billion to $45 billion in capital inflows in the first 12 months. Kendrick also predicts that the ETF will push ETH to $8,000 by the end of 2024.
Noelle Acheson, former head of market insights at Genesis Global Trading and a researcher, said that multiple indicators show that institutional interest in Ethereum ETFs is far lower than that in Bitcoin. Eric Balchunas, ETF analyst at Bloomberg Industry Research, expects Ethereum ETFs to account for "10-15% of Bitcoin ETF assets." ETH futures ETFs currently have only 4% of BTC futures ETFs. As for the spot Ethereum ETF itself, existing data suggests that institutional interest may also be lacking.
Earlier in Wu's podcast, lawyer Winter Soldier believed that when the Bitcoin ETF passed, I thought the Ethereum ETF would pass sooner or later. The approval of the spot ETF requires two important conditions: one is a mature futures trading market, and the other is the stability between spot and futures prices. This is why the Ethereum spot ETF was able to pass smoothly after the Bitcoin ETF was passed. If Bitcoin can reach $100,000 in the future, it is also possible for the price of Ethereum to reach $6,000-8,000. This forecast is relatively conservative, and the actual situation still depends on the macroeconomic trend. The Solana spot ETF is less likely to pass because of the lack of futures ETFs and insufficient decentralization.
James Seyffart, ETF analyst at Bloomberg, said in an interview that the demand for spot Ethereum ETFs could reach 20% to 25% of the demand for spot Bitcoin ETFs. James Seyffart pointed out that this prediction is based on the Ethereum market size being about 30% of Bitcoin. Limitations of Ethereum ETFs include the inability to stake and the inability to take advantage of on-chain utility. Bitwise Chief Investment Officer Matt Hougan predicts "huge demand" for spot Ethereum ETFs, which will come from diversified investments and interest in high-growth technology investments.
Shenyu, co-founder of Cobo and F2pool, said that in the early stage of ETH ETF's listing, the main capital inflow may come from retail investors, accounting for 80-90% of the total funds, and institutional users will participate less; after December, institutional investors may gradually enter the market.
