Spot Ether (ETH) exchange-traded funds (ETFs) to attract $15 billion in net inflows in first 18 months: Bitwise

Ether (ETH) Spot exchange-traded funds (ETFs), expected to be approved for trading in the United States in the coming months, are likely to attract $15 billion in net inflows in their first 18 months, wrote Matt Hougan, Bitwise’s chief investment officer, in a statement. report Monday.

One way to estimate potential inflows is to consider bitcoin’s relative market capitalizations. (BTC) and ether, according to the report. Bitcoin currently accounts for 74% of the combined market value, the report notes. Investors will likely invest in Bitcoin and ether ETFs in equal proportions.

U.S. investors have invested $56 billion in spot Bitcoin ETFs since their launch in January, a figure expected to reach $100 billion or more by the end of 2025 as major brokerages approve the products for trading on their platforms, the asset manager said.

“Using that $100 billion figure as a benchmark, ether spot ETPs would need to attract $35 billion in assets to reach parity, a process I expect will take about 18 months,” Hougan wrote.

The Grayscale Ethereum Trust (ETHE), with $10 billion in assets under management (AUM), is set to convert to a cash ETF, leaving $25 billion in inflows to reach parity.

In Canada, however, ether ETPs represent only 22-23% of total assets under management, “which is slightly underperforming relative to their absolute market capitalization weighting,” the report notes. The gap may be linked to bitcoin’s first-mover advantage, Hougan wrote.

“Some investors may have purchased a Bitcoin ETP and stopped there, thinking their crypto exposure was hedged,” the report said, adding that this dynamic could also be true in the United States. Assuming ether ETFs capture only 22% of the market, as in Canada, that reduces the estimate of net new flows to $18 billion, and other factors take away another $3 billion.

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