Speculations are on the rise following the sudden approval of the Ethereum Spot ETF last week. Renowned Bloomberg ETF analyst, James Seyffart, recently shared his thoughts on the potential performance of these funds in comparison to their Bitcoin-based equivalents. Seyffart predicts that the Ethereum spot ETFs may only attract about 25% of the demand seen by the Bitcoin spot ETFs. This prediction is based on various factors, including the significant differences in market caps between Ethereum and Bitcoin.
According to data from CoinMarket, Ethereum’s total market share is currently valued at $449.25 billion, which is approximately 30% of Bitcoin’s $1.35 trillion market cap. This substantial difference in market capitalization may play a significant role in determining the level of investments that the Ethereum spot ETFs will attract compared to their Bitcoin counterparts.
In addition to the differences in market capitalization, Seyffart also highlighted the disparities between the Ethereum spot ETF and the underlying cryptocurrency itself. He noted that there is a larger gap between Ethereum as an ETF and as a cryptocurrency compared to Bitcoin. This distinction may limit investors from accessing certain features, such as staking and other on-chain use cases in terms of DeFi, NFTs, and DAOs. Some investors may opt to invest directly in Ethereum rather than through the ETF.
Seyffart predicts that the Ethereum Spot ETFs will see “big launches” but may not reach the same level of investments as the Bitcoin spot ETFs. He anticipates that these novel investment funds will attract between 20-25% of the investments seen in their Bitcoin-based peers once trading begins. On the other hand, fellow Bloomberg analyst Eric Balchunas has a more conservative projection of 15-20%.
The performance of the Ethereum spot ETFs will likely have a significant impact on other crypto spot ETFs seeking approval from the US Securities and Exchange Commission. The approval of the XRP ETF is highly anticipated by many enthusiasts, but regulatory clarity on the institutional sales of XRP remains a critical factor in its debut.
In other news, Ethereum is currently trading at $3,766, showing a 0.51% gain in the last day. Despite this slight positive performance, Ethereum has shown strong performance throughout the week, with a combined gain of 20.47% in the last seven days. However, the daily trading volume for ETH has decreased by 51.27% and is currently valued at $10.03 billion.
The potential performance of the Ethereum spot ETFs remains uncertain, with analysts offering varying predictions. The market cap differences between Ethereum and Bitcoin, as well as the limitations of the ETF compared to direct investment in the cryptocurrency, may play crucial roles in determining the level of investor interest in these novel investment funds. The performance of the Ethereum spot ETFs could pave the way for future crypto spot ETFs, but regulatory clarity and market conditions will ultimately shape their success.
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