Ethereum ETFs Expected to Draw Around 33% of Bitcoin ETF Inflows: Galaxy Digital

Galaxy Digital, a crypto company, has made predictions regarding the potential of Ethereum (ETH) exchange-traded funds (ETFs) compared to Bitcoin (BTC) ETFs. In a recent research publication by Charles Yu, the vice president of research at the firm, it is estimated that Ethereum ETFs are likely to attract approximately one-third of the investments seen in similar Bitcoin products.

To arrive at this projection, Yu explains that the firm analyzed various factors including the market capitalization of both assets, open interest levels, futures market volume, and the total assets under management (AUM) of existing funds. The analysis suggests that inflows into Ethereum spot ETFs could be around three times lower than those of US spot Bitcoin ETFs, with a potential range of two to five times. In simpler terms, it is anticipated that Ethereum spot ETF inflows may amount to approximately 33% of the size of US spot Bitcoin ETF inflows, with a range varying from 20% to 50% in dollar terms.

By applying this multiple to the $15 billion inflow into Bitcoin spot ETFs up to June 15, it is projected that monthly ETH ETF inflows could reach approximately $1.0 billion during the initial five months post the approval and launch of an Ethereum ETF, with an estimated range of $600 million to $1.5 billion per month.

Yu also emphasizes that the introduction of ETH ETFs is expected to have a positive influence on the Ethereum markets for several reasons. Firstly, it would enhance accessibility across different wealth segments. Secondly, formal recognition by regulators and reputable financial services brands would lead to increased acceptance. An ETF would expand the reach to both retail and institutional investors, provide broader distribution through various investment channels, and bolster the case for incorporating ether into investment portfolios across different strategies. Moreover, a deeper understanding of Ethereum by financial experts could potentially accelerate investments and the adoption of the technology.

In conclusion, Galaxy Digital’s insights shed light on the potential impact of Ethereum ETFs compared to Bitcoin ETFs, offering a glimpse into the evolving landscape of crypto investments and market dynamics.