Ethereum
Citi Expects $5.4 Billion Ethereum ETF Inflows in Six Months, Analysts See ETH Hitting New ATHs!
Citi forecasts $5.4 billion in inflows for ETH ETFs
As Ethereum spot ETFs debut on U.S. exchanges, Citi predicts substantial inflow volume in six months as analysts predict Ethereum rally to a new ATH. According to a recent report by CNBC, Citi expects potential inflows of up to $5.4 billion for these ETFs over the next six months, a substantial amount that underscores the growing interest in regulated crypto investment vehicles. This launch follows the previous launch of Bitcoin spot ETFs that saw approximately $17 billion in inflows in six months.
Analysts predict that Ethereum could hit the $5,000 mark this year as institutional money begins to flow in. Amid the debut of Ethereum spot ETFs, ETH is trading around $3,450, down more than 1% in the past 24 hours.
ETH ETFs will push prices to ATH!
Bitwise Chief Investment Officer Matt Hougan said that while US spot Ether ETFs will have a rough start, it could have a bigger impact on the asset’s price than Bitcoin ETFs for BTC.
While he said the first few weeks could be bumpy due to the outflow of $11 billion from the Grayscale Ethereum Trust (ETHE) after it converted to an ETF, by the end of the year he is confident that new highs will be reached, Bitwise chief investment officer Matt Hougan wrote in a report. He added that significant results should not be expected immediately given the potential selling pressure similar to what Bitcoin faced when it launched.
Ether ETFs will have a bigger impact!
Bitwise said the money flowing into the new Ether spot ETFs will have a bigger impact than Bitcoin for three structural reasons. Ether’s short-term inflation rate is 0%, and when the Bitcoin versions launched, the network inflation rate was 1.7%, so there is significant demand for zero supply. Unlike Bitcoin miners, ETH stakers don’t need to sell, and 28% of ETH is staked and therefore off the market.
Spot Ether ETFs are expected to generate $15 billion in net inflows in their first 18 months of trading, the report added.
The SEC’s View on Staking
While Hougan is optimistic that Ethereum will reach $5,000 and beyond by the end of the year, futures traders are betting on a short-term decline in Ethereum’s price.
Additionally, the SEC’s stance on not allowing Ether staking in ETFs poses a potential roadblock to the cryptocurrency’s adoption. Historically, approvals have hinged on the jurisdictional link between futures transactions, which CNBC notes does not exist between Ethereum and Bitcoin.