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Demand for spot ethereum ETFs will be just a fraction of what was seen for spot bitcoin ETFs, JPMorgan said.
Spot Ether ETFs may begin trading in late June once the US securities regulator approves S-1 filings. But JPMorgan analysts predict that the initial market reaction to the products “will likely be negative.”
bitcoin spot ETFs broke records: BlackRock's iShares bitcoin Trust reached $20 billion in assets in less than 137 days.
But Ether ETFs will only attract between $1 billion and $3 billion in 2024, assuming they begin trading before the end of the year, JPMorgan said.
ethereum ETFs 'less attractive' for investors without staking
The investment bank said Ether ETFs will be “less attractive” to investors than they otherwise would have been because the U.S. Securities and Exchange Commission required issuers not to provide betting returns. Therefore, investors might prefer platforms that generate returns by staking eth, she said.
bitcoin's first-mover advantage and halving event, which occurs every four years and last occurred in April, could make investors prefer it over Ether, he added.
Bloomberg ETF analyst Eric Balchunas says ethereum ETFs can capture inflows of up to 20% of the bitcoin ETF market.
<blockquote class="twitter-tweet” data-width=”550″ data-dnt=”true” wp_automatic_readability=”9.8904899135447″>
10 may be a bit excessive… but I would at least divide it by 5 when it comes to expectations around ebbs/volume/media/everything regarding bitcoin Spot ETFs from Ether Spot ETFs. That said, getting 20% of what they got would be a huge profit or a successful launch by normal ETF standards. https://t.co/QDenr3jY2B
— Eric Balchunas (@EricBalchunas) twitter.com/EricBalchunas/status/1795777989369561135?ref_src=twsrc%5Etfw”>May 29, 2024
He said that Ether ETFs will be seen as similar to silver in the precious metals market, and that bitcoin ETFs are gold and silver ETFs that have only a 15% market share.
“Many will not feel the need to go beyond bitcoin/gold for their cryptocurrency/precious metals allocation,” he said.
Still, JPMorgan said net inflows will increase if the US Congress endorses eth as a commodity.
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