Ether ETF Inflows Expected to Propel ETH Price Above $5,000: Bitwise

The imminent launch of spot ether exchange-traded funds (ETFs) in the United States is anticipated to propel the value of the second-largest cryptocurrency to unprecedented levels surpassing $5,000, as stated in a report by Bitwise.

Although the surge may not occur immediately and initial price movements could be erratic due to capital exiting the $11 billion Grayscale Ethereum Trust (ETHE) following its transition to an ETF, Bitwise’s chief investment officer, Matt Hougan, highlighted in a report on Tuesday that new highs are expected by the year’s end. He expressed confidence in the potential for even higher prices if the inflows exceed market expectations.

Comparatively, bitcoin has experienced a 25% increase since the introduction of spot ETFs in the U.S. in January, and a remarkable surge of over 110% since the market began factoring in a possible launch in October of the previous year.

Bitwise pointed out that the impact of funds flowing into new ether spot ETFs is projected to be more substantial than that seen with bitcoin due to three fundamental reasons. Firstly, Ether’s short-term inflation rate stands at 0%, contrasting with bitcoin’s 1.7% inflation rate during the launch of its respective versions, resulting in considerable demand meeting limited supply. Additionally, unlike bitcoin miners, ETH stakers are not compelled to sell, with 28% of ETH being staked and thus withdrawn from circulation.

The report also forecasts that Ether spot ETFs are poised for success, estimating a substantial $15 billion in net inflows within their initial 18 months of trading.

Steno Research echoed a similarly optimistic sentiment regarding the cryptocurrency in a recent report, foreseeing Ether reaching a minimum of $6,500 later this year owing to anticipated inflows into spot ETFs alongside other favorable market conditions.

In conclusion, the impending introduction of spot ether ETFs in the U.S. is anticipated to significantly impact the cryptocurrency market, with experts projecting a surge in Ether’s value to unprecedented levels, driven by the unique dynamics of the cryptocurrency and the expected inflows into spot ETFs.

This article was edited by Parikshit Mishra.