Ethereum ETF Will Take Only 20% of Spot Bitcoin ETF Flows
As anticipation grows for the launch of spot Ethereum ETFs, Bloomberg Senior ETF Analyst Eric Balchunas is monitoring the situation closely. It also hinted that inflows into these ETFs would be lower, providing information about potential market dynamics. He also expects Ether ETFs to see only one-fifth the success achieved by Spot Bitcoin ETFs.
Bloomberg Analyst Provides Information on Ethereum ETF Launch
Balchunas, known for his comprehensive ETF analysis, predicted a scenario that mirrors the race surrounding Bitcoin ETFs. He predicted a “carbon copy horse race,” albeit with lower volume expectations. “Anything you see with BTC, I divide by about 10,” he said.
Additionally, the analyst suggested moderate enthusiasm that the estimated initial flow would be “maybe $1 billion or $2 billion in the first few weeks in total.” However, Balchunas has since revised his estimates, noting that “dividing by 10 might be a bit much.” That’s why he adjusted his Ethereum ETF forecast, suggesting a five-fold split compared to Bitcoin ETF expectations.
He emphasized that despite the stagnant outlook, even reaching 20% of Bitcoin’s traction power would mean a significant victory. “Taking 20% of the holdings would be a big win,” he confirmed. Additionally, he considered it a “successful launch” that Ethereum ETFs managed to garner one-fifth of Spot Bitcoin ETF flows, or trading volumes.
Drawing parallels between Ethereum and Bitcoin, Balchunas emphasized the importance of ETH’s share in different global spot markets. By analyzing data from various regions, he pointed out Ethereum’s varying market shares compared to Bitcoin.
In the United States futures market, Ethereum has a share of over 15%, while Bitcoin has a share of more than 80%. Additionally, Balchunas based his forecast on US futures data, among other key metrics. Meanwhile, Bitcoin has over 80% dominance in Hong Kong.
Particularly in Canada and Switzerland, Ethereum has a more significant share of 30%, signaling potential regional preferences. Of particular interest is Sweden, where Ethereum’s market share is approaching 40%, a notable milestone. However, Bitcoin dominates all these markets, which makes the latest prediction more meaningful.
Also Read: BlackRock’s IBIT Becomes Largest Bitcoin Fund Overtaking Grayscale
Drawing Parallels with Precious Metals ETFs
On the contrary, Balchunas expressed skepticism about the low estimates due to European market dynamics. The analyst noted the increasing adoption of Ether in European markets. He added: “Stronger showings in Europe led me to split the difference with an eventual share estimate of 20%.”
Balchunas drew parallels with precious metal ETFs to contextualize Ethereum’s position in the crypto investment landscape. The analyst compared Ethereum to silver and highlighted that ETH is similar to silver’s 15% share compared to gold ETFs.
Therefore, Ethereum can be seen as a complementary asset to Bitcoin. He emphasizes that Bitcoin and gold serve as primary allocations for many investors. While Ethereum plays a similar role as silver in portfolio diversification, this is why Balchunas makes a more conservative prediction.
Also Read: Bitcoin and Ethereum Post Record $1.36 Billion Inflows Amid ETF optimism, Will Prices Rise?
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