Spot Ethereum ETFs, once approved for trading, could achieve net inflows of around $1 billion per month, Galaxy Research reported on Wednesday.
“We expect net inflows to ETH ETFs to reach 20-50% of BTC ETFs in the first five months, with a target of 30%, equivalent to $1 billion per month,” the analyst said. written by Charles Yu.
Ether ETFs are moving closer to trading in the U.S. after the Securities and Exchange Commission (SEC) approved applications from applicants last month. The agency must also approve their S-1 filings before the products can trade. Spot bitcoin ETFs launched in the U.S. in January.
Similar to bitcoin ETFs, new demand for Ether versions is expected to come from independent investment advisors or broker/dealer platforms, the report said.
Ether will be more sensitive to price volatility due to ETF inflows than bitcoin because the overall ETH supply is locked in staking, bridges and smart contracts, and the amount of ETH held on centralized exchanges is lower, according to Galaxy.
Galaxy warns that demand for spot Ether ETFs may be limited due to the lack of staking rewards.
Outflows from the Grayscale Ethereum Trust (ETHE) are also likely to be a factor hindering Ether ETF inflows, and Galaxy estimates that these negative outflows could be around 319,000 ETH per month or 1, 1 million dollar. However, due to the smaller percentage of Ether held in these trusts, an ETHE ETF conversion will have a smaller impact on ETH price than a Grayscale Bitcoin Trust (GBTC) conversion.
Unlike GBTC, ETHE is not facing forced selling due to bankruptcy from companies like 3AC and Genesis, which supports the view that Ether will see less selling pressure related to Grayscale trusts than bitcoin, the report added.
The SEC could approve spot Ether ETFs as early as July 4, Reuters reported on Thursday.
Jia Bao Ngoc
According to CoinDesk
