According to a report by Coindesk citing Bernstein, demand for Ethereum spot ETFs is expected to be much lower than that of Bitcoin spot ETFs. This is the same as JP Morgan’s previous view, emphasizing that ETH does not have a demand catalyst such as Bitcoin’s halving, and the value proposition of Bitcoin investors is different from that of ETH and cannot be compared.
(Bernstein: Election sentiment shifts to the Republican Party, cryptocurrency will become a “Trump trade”)
Bernstein: There are fundamental differences between Ethereum and Bitcoin
Ethereum spot ETF lacks staking functionality
In a report on Monday, Bernstein analysts Gautam Chhugani and Mahika Sapra predicted that the demand for Ethereum spot ETFs would be far smaller than that of Bitcoin spot ETFs, and pointed out the reasons:
Since Ethereum spot ETFs lack staking functionality, the need for spot conversion will be relatively small.
In other words, Ethereum spot ETF allows investors to hold ETH through traditional financial channels, but most ETH holders want to actively participate in the Ethereum ecosystem to obtain the benefits provided by the staking platform.
Here, instead of buying Ethereum spot ETF, investors should hold real ETH directly on the chain, which will lead to more efficient use of funds and profits.
Analysts also pointed out that despite the recent correction in the crypto market, institutional adoption continues to grow as expected.
They predict that the main healthy liquidity creators in the Ethereum spot ETF market in the future will be basis trading traders, promoting liquidity in the ETF market through arbitrage trading between spot ETFs and futures contracts.
Ethereum’s primary use case is a tokenization platform
At the same time, analysts also clarified the essential differences between Ethereum and Bitcoin:
ETH, as a major tokenization platform, is establishing strong use cases for stablecoin payments and the tokenization of traditional assets (RWA).
Yesterday, Bloomberg analyst Eric Balchunas and SEC Chairman Gary Gensler both expressed optimism about the approval progress of the Ethereum spot ETF. The former pointed out that the Ethereum spot ETF will be approved for listing as soon as July 2. Investors are concerned about this Also wait and see.
(VanEck launches fee war, Ethereum spot ETF is expected to be listed on July 2)
Crypto Regulation Will Be Clear Before and After the Election
Finally, in the face of the current unclear situation of encryption supervision, analysts agree that digital assets, including ETH, need a more complete regulatory system, and this situation may improve before and after the US election in November:
As the chances of the Republican Party winning the election gradually increase, and its presidential candidate Trump tends to support cryptocurrency, relevant regulations will improve.
(Trump vows to end the encryption law enforcement war and advocates the entry of the encryption industry into Florida)
JP Morgan: Bitcoin spot ETF has first-mover advantage
Previously, Wall Street giant JPMorgan Chase also made predictions about the market size of Ethereum spot ETFs, saying that it would attract up to $3 billion in net inflows this year, but it would still pale in comparison to the Bitcoin spot ETF market.
Bitcoin has first-mover advantage
Analyst Nikolaos Panigirtzoglou expressed the same view as Bernstein in the report, believing that the size of the Ethereum spot ETF will be much smaller than the Bitcoin spot ETF:
Bitcoin spot ETFs already have a first-mover advantage and may have saturated the overall market with demand for the crypto asset.
And added, “Bitcoin competes with ‘gold’ in investors’ portfolio allocation, which is more attractive to investors than Ethereum.”
Bitcoin has halving push, Ethereum doesn’t
In addition, in terms of market momentum, the Bitcoin halving event, as a potential bullish event, is also an additional catalyst for creating demand for Bitcoin spot ETFs:
There is no similar push for Ethereum.
(10x Research: Bitcoin’s rise is due to macro factors, and halving and ETFs are not bullish)
Ethereum is less liquid than Bitcoin
Finally, analysts also mentioned that because the trading activity in the Ethereum market is not as active as that of Bitcoin, and the total assets under management (AUM) are also smaller, institutional investors may not be as interested in Ethereum spot ETFs as they are in Ethereum spot ETFs. Bitcoin spot ETF is so high.
Overall, J.P. Morgan believes that the initial market reaction to the Ethereum spot ETF is likely to be negative and may put downward pressure on the price of ETH.
In this article, Bernstein and JPMorgan Chase both claim that the demand for Ethereum spot ETFs is far less than that of Bitcoin. What is the difference in their views? First appeared in Chain News ABMedia.
