Ethereum Price Expected to Soar to $5,000 Post ETFs Introduction, Says Bitwise Executive

Matt Hougan, the chief investment officer at Bitwise Asset Management, made a bold prediction that the price of Ethereum could soar beyond $5,000 in the wake of Ethereum ETFs hitting the market. He anticipates that the inflow of funds from ETFs will drive Ethereum’s value to new all-time highs, surpassing the $5,000 mark. Hougan expressed confidence that by the end of the year, Ethereum will reach these new peaks.

Hougan’s optimistic outlook is based on the belief that the introduction of ETFs will introduce a surge in demand without altering the fundamental supply dynamics of Ethereum. He drew parallels to the impact observed with Bitcoin when ETFs for the digital currency were launched, leading to a significant price surge.

The anticipated price hike is expected to be driven by the interaction between supply and demand dynamics. Hougan highlighted that ETF inflows could have a substantial impact on Ethereum’s price, similar to the scenario observed with Bitcoin. He emphasized that Bitcoin ETFs have acquired a significant amount of BTC since their launch, exceeding the amount produced by miners, resulting in a notable price increase.

Hougan outlined three key reasons why Ethereum could see a more pronounced impact from ETF inflows compared to Bitcoin. Firstly, Ethereum has maintained a 0% inflation rate over the past year, with a stable supply of 120 million ETH. This contrasts with Bitcoin’s 1.7% inflation rate at the time of its ETF launch. Additionally, Ethereum’s staker dynamics differ from Bitcoin miners, as Ethereum stakers do not face the same pressure to sell their holdings to cover operational costs.

Furthermore, a significant portion of Ethereum is staked or locked in decentralized finance (DeFi) contracts, with 28% of all ETH effectively off the market. Hougan expects that Ethereum ETFs could attract approximately $15 billion in new assets over the first 18 months, potentially propelling Ethereum’s price from its current level of around $3,400 to new heights.

With Ethereum trading close to $3,400, just 29% below its all-time high, Hougan believes that the introduction of ETFs and the ensuing demand dynamics make it probable for Ethereum to challenge and surpass its previous price records.