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Demand for spot Ethereum ETFs (exchange-traded funds) will only be a fraction of what was seen for spot Bitcoin ETFs, JPMorgan said.
Spot Ether ETFs may start trading as early as late June once the US securities regulator approves S-1 filings. But JPMorgan analysts predict that the initial market reaction to the products is “likely to be negative.”
Spot Bitcoin ETFs broke records, with BlackRock’s iShares Bitcoin Trust hitting $20 billion in assets in under 137 days.
But Ether ETFs will only attract between $1 billion and $3 billion in 2024, assuming they start trading before the end of the year, JPMorgan said.
Ethereum ETFs are “Less Attractive” To Investors Without Staking
The investment bank said that Ether ETFs will be “less attractive” to investors than they otherwise would have been because the US Securities and Exchange Commission demanded that issuers not provide staking yields. Investors might thus prefer platforms that generate yields by staking ETH, it said.
Bitcoin’s first-mover advantage and the halving event, which happens every four years and last occurred in April, could further cause investors to prefer it to Ether, it added.
Bloomberg ETF analyst Eric Balchunas says that Ethereum ETFs may capture inflows of up to 20% of the Bitcoin ETF market.
10 may be a bit much.. but I'd at least divide by 5 when it comes to expectations around the Ether spot ETFs re flows/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. https://t.co/QDenr3jY2B
— Eric Balchunas (@EricBalchunas) May 29, 2024
He said Ether ETFs will be viewed as similar to silver in the precious metals market, with Bitcoin ETFs being gold and silver ETFs holding only a 15% market share.
“Many won’t feel the need to go beyond bitcoin/gold for their crypto/precious metals allocation,” he said.
Still, JPMorgan said that net inflows will surge if the US Congress endorses ETH as a commodity.
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