Spot Ether (ETH) ETFs could see demand from the same sources as Bitcoin (BTC) versions, but on a smaller scale: Bernstein

Ether (ETH) Spot exchange-traded funds (ETFs), once approved for trading, will likely experience the same sources of demand as bitcoin. (BTC) ETF but on a lower scale, broker Bernstein said in a research report on Monday.

“ETH is not expected to see as many conversions from ETH to spot due to the lack of an ETH staking feature in the ETF,” wrote analysts Gautam Chhugani and Mahika Sapra, adding that the exchange base will likely find takers over time and that this should contribute to healthy liquidity. in the ETF market. The basic transaction is to buy the spot ETF and sell the futures contract at the same time, then wait for the prices to converge.

Spot Ether ETFs are about to become available to investors in the United States after the Securities and Exchange Commission (SEC) approved key regulatory filings for issuers last month.

“ETH, as the leading tokenization platform, provides a strong use case, both for stablecoin payments and for tokenizing traditional assets and funds,” the authors wrote.

Ether and other digital assets need a “more improved regulatory regime” and Bernstein expects the discourse to improve around the US elections later in the year as the chances of Republican victory continues to improve and because Trump is now pro-crypto.

“Despite the recent pullback in crypto markets, the “structural adoption cycle remains intact,” the report adds.

Wall Street giant JPMorgan said ether spot ETFs would likely see much lower demand than bitcoin ETFs, noting that the world’s largest cryptocurrency has a first-mover advantage and could potentially saturate overall demand for crypto exchange-traded funds, it said in a report. last month.

Source