Following the sudden approval of the ethereum Spot ETF last week, speculation continues to arise about the potential performance of these funds ahead of their first trading session. More recently, renowned Bloomberg ETF analyst James Seyffart weighed in on the topic, expressing his opinion on the potential level of investments ethereum spot ETFs could make relative to their bitcoin-based counterparts.
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eth Spot ETF limited by ethereum utility and other factors: analyst
in ax.com/BitwiseInvest/status/1793733918870639072″ target=”_blank” rel=”nofollow”> interview session at x On May 24, hosted by Bitwise Chief Investment Officer Matt Hougan, Seyffart stated that Ether spot ETFs would likely see a maximum of 25% of the demand seen by bitcoin spot ETFs.
Seyffart based his predictions on multiple elements, starting with enormous differences in market capitalizations between both assets. According CoinMarket dataethereum's total market shares are valued at $449.25 billion, which is roughly equivalent to 30% of btc's 1.35 trillion market capitalization.
Furthermore, the analyst also highlighted the large disparities in the difference between both ETFs and their base assets. According to Seyffart, there is a larger gap between ethereum as an ETF and as a cryptocurrency than bitcoin as an ETF and as itself.
The ETF analyst believes that eth spot ETFs will limit investors from the native features of ETFs such as staking, a major source of passive income, and other on-chain use cases in terms of DeFi, nft, DAO, etc. . Therefore, certain investors might prefer to invest directly in altcoin.
Taking all of these factors into account, Seyffart predicts that these new investment funds will produce “big launches,” but not at the level of bitcoin spot ETFs. He predicts that ethereum spot ETFs will record 20% to 25% of investments in their bitcoin-based peers once trading begins. Meanwhile, Bloomberg analyst Eric Balchunas seems less optimistic with a 15-20% projection.
The performance of ethereum spot ETFs will undoubtedly influence other cryptocurrency spot ETFs that may gain approval from the US Securities and Exchange Commission. Currently, many enthusiasts consider the XRP ETF to be next. market debutant, but this is still subject to many factors, especially regulatory clarity on institutional sales of XRP.
ethereum Price Overview
In other news, ethereum is trading at $3,766 with a gain of 0.51% in the last day. This slight positive performance underlines ethereum's form throughout the week with a combined 20.47% gain recorded over the past seven days. Meanwhile, eth's daily trading volume dropped by 51.27% and is valued at $10.03 billion.
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