Ethereum ETFs Could ‘Get a 20% Stake’ in BTC ETFs
The US ETH ETF could attract less capital flows compared to US BTC ETF products. The analyst based his projection on ETH futures ETFs versus BTC and Silver versus Gold.
The long-awaited U.S. launch. Ethereum [ETH] ETFs (exchange-traded funds) may have a hard time replicating the success of the Bitcoin [BTC] ETF. According to Eric Balchunas, ETF analyst at Bloomberg, the much-hyped ETH spot ETFs could capture about “20%” of the BTC ETF’s market share.
Part of Balchunas analysis read as follows:
“I’d at least divide by 5 when it comes to expectations around the Ether spot ETFs reflows/volume/media/everything relative to spot bitcoin ETFs. That said, grabbing 20% of what they got would be huge win/successful launch by normal ETF standards.”
Ethereum ETF vs. Silver ETFs
The analyst’s 20% market share for the BTC ETF is based on current market share in the futures market. ETH ETF instruments are already available as ETF futures offerings in several jurisdictions.
Based on the futures market share between BTC and ETH, Balchunas presented that ETH only averaged about 20%, a likely scenario that could also occur for spot ETFs.
“The poor showing of the eth futures is big part of my calculus. That said, the stronger showings in Europe have me splitting dif with final predication of 20% share,” Balchunas pointed out.
In addition, the analyst compared BTC to gold and Ethereum to silver and did another analysis and assumed a gold versus silver ETF basis. According to Balchunas, silver ETFs currently have only 15% of the market share of gold ETFs. He added that “Many won’t feel need to go beyond bitcoin/gold for their crypto/precious metals allocation.”
As of May 28, U.S. spot BTC ETFs had total flows of $13.7 billion. According to Balchuna’s projection, this could be equivalent to $2.7 billion in ETH ETFs over the same period.
However, from a Hong Kong perspective, specifically based on Bosera’s top ETFs, BTC flows were twice as large as ETH flows for spot products.
According to Farside data, Bosera’s spot BTC ETF in Hong Kong saw total inflows of $15.3 million, compared to $7.5 million for its ETF product. This translates to about 50% of the BTC ETF inflows for Bosera’s spot ETH ETF.
Yet, ETH’s spot market capitalization of $454 billion was 34% of BTC’s $1.3 trillion, according to CoinMarketCap data.
That said, US spot ETH ETF products could launch in July, and some analysts expected the ETH price to reach $4,500 before trading begins.
Balchunas’ analysis provides insight into the potential growth and positioning of Ethereum ETFs within the broader investment landscape. However, the actual growth of Ethereum ETFs will depend on a number of factors, including market trends, investor sentiment and regulatory developments.
By Audy Castaneda