Spot Ethereum ETFs May Fall Short of Expectations
JPMorgan analysts have stated that spot Ethereum ETFs may not attract the expected interest due to their similarity to existing Bitcoin ETFs. In a 25-page “Flows and Liquidity” report presented on Thursday, Nikolaos Panigirtzoglou’s team dedicated less than a single page to ETH. The team also explained why Spot Ethereum ETFs cannot compete with Bitcoin ETFs.
One of the main reasons highlighted by the analysts is Bitcoin’s advantage of being the first cryptocurrency. Even if Spot Ethereum ETF approval is granted, most of the demand has already been met by Bitcoin.
Additionally, JPMorgan analysts emphasized the disadvantage of removing the staking feature from Ethereum ETFs, as per the filings. This puts them at a disadvantage compared to platforms that offer staking returns.
According to JPMorgan’s calculations, if the ETF starts trading before the end of the year, it could see net inflows ranging from $1 billion to $3 billion throughout the rest of 2024.
Spot Bitcoin ETF Process May Repeat
Data provided by The Block shows that the assets under management for spot Bitcoin ETFs were at $59 billion as of May 30. When spot Bitcoin ETFs began trading on January 10, Grayscale Bitcoin Trust’s AUM was at $28.7 billion. Grayscale Ethereum Trust’s AUM was at $11 billion as of Thursday.
Analysts warn that, similar to Grayscale’s Bitcoin product, Ethereum ETFs may experience similar inflows once they start trading.
Disclaimer: The information in this article should not be considered as investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own research.
