Ether ETFs Expected to Draw $15 Billion in Net Inflows Within Initial 18 Months: Bitwise

Ether spot exchange-traded funds (ETFs) for Ethereum (ETH) are poised to receive approximately $15 billion in net inflows within their initial 18 months of trading, as stated by Bitwise’s Chief Investment Officer, Matt Hougan. This projection was detailed in a report released on Monday. The estimation of potential inflows is based on a comparison of the market capitalizations of bitcoin (BTC) and ether, with bitcoin currently representing 74% of the combined market value. It is anticipated that investors will distribute their allocations between bitcoin and ether ETFs accordingly.

Since the introduction of spot bitcoin ETFs in the United States in January, American investors have already injected $56 billion into these products. This figure is forecasted to exceed $100 billion by the conclusion of 2025, especially as major wirehouses approve these offerings for trading on their platforms. Hougan indicated that for spot ether ETPs to reach a similar scale, they would need to amass around $35 billion in assets, a process he anticipates will take approximately 18 months. The Grayscale Ethereum Trust (ETHE), currently managing $10 billion in assets, is anticipated to transition into a spot ETF, necessitating an additional $25 billion in inflows to achieve parity.

In contrast, in Canada, ether ETPs constitute only 22%-23% of total assets under management (AUM), slightly lagging behind their proportional market cap weight. This discrepancy is attributed to the advantage bitcoin holds as a first mover in the cryptocurrency space, according to Hougan’s analysis. The report highlighted that some investors may have acquired a bitcoin ETP and halted further diversification, assuming their exposure to the crypto market was sufficient. This behavior may also be observed in the U.S. market. Should ether ETFs mirror Canada’s market share at 22%, the projected net new inflows would be reduced to $18 billion, with additional factors further reducing this estimate by $3 billion.

To delve deeper into this topic, you can explore additional insights on the demand dynamics of Ether spot ETFs compared to their Bitcoin counterparts in the article titled “Ether Spot ETFs Could See Lower Demand Compared to Bitcoin Peers: Bernstein.”