Ethereum spot ETFs are gearing up for a massive influx, with forecasts suggesting a whopping $5 billion surge in their early stages, courtesy of insights from Gemini. This forecast aligns with earlier predictions from Bitwise and K33 Research.
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Tracing Ethereum’s Rise
According to a report, Gemini predicts that Ethereum (ETH) spot ETFs could attract up to $5 billion in net inflows during their first six months of trading in the U.S. Currently, Ethereum holds a 28% share of global assets under management (AUM), highlighting its significant role in the crypto market. Despite being undervalued compared to Bitcoin, Ethereum’s strong position and market dynamics suggest growth potential.
Combined with existing assets from the Grayscale Ethereum Trust, this would push the total AUM for Ethereum spot ETFs in the U.S. to between $13 billion and $15 billion.
Catch-Up Trade Potential
According to the report, if the Ethereum/Bitcoin ratio returns to its average level from the past three years, Ether’s price could increase by nearly 20% to 0.067 BTC per ETH. If it hits the highest level of the past three years, Ether’s price could rise by 55% to 0.087 BTC per ETH. For spot Ether ETFs, Gemini says that inflows below $3 billion would be disappointing compared to the $15 billion inflows for Bitcoin ETFs.
However, if Ethereum ETFs attract over $5 billion, it would be a strong performance, and anything near $7.5 billion would be a huge success.
Comparison to Bitcoin ETFs
Much like Bitcoin, Ethereum is witnessing a surge in institutional interest. Forecasts indicate that the open interest on the Chicago Mercantile Exchange (CME) could reach 23% of Bitcoin’s, highlighting the growing institutional involvement. These indicators hint that Ethereum is poised to replicate the success of Bitcoin spot ETFs, Bitcoin spot ETFs have seen $56 billion in investments since their launch, with expectations of reaching $100 billion by the end of 2025.
Gemini suggests that net inflows into Ethereum spot ETFs below $3 billion would be disappointing compared to Bitcoin’s $15 billion in the first six months. Still, inflows above $5 billion would be a strong performance. An even greater inflow of up to $7.5 billion would be considered a significant success.
The anticipation of strong ETF inflows and robust on-chain dynamics supports the positive outlook for Ethereum. Due to these factors, Steno Research also forecasts that Ethereum could reach $6,500 later this year.
What Next?
The optimism surrounding Ethereum’s prospects mirrors the craze witnessed in Bitcoin ETFs, which garnered an impressive $58 billion within five months post-launch. Should spot Ether ETFs follow a similar trajectory, they could propel Ethereum to new heights, as institutions diversify their Bitcoin holdings into Ethereum, fostering market stability and growth.
Excited about the future of Ethereum? We are too!
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