The recently approved Spot Ethereum ETF is expected to see far lower demand from investors than its Bitcoin counterpart, Bernstein says. Indeed, the management firm released a research report Monday forecasting the second crypto-based exchange-traded product to see demand on a much lower scale.
The Ethereum ETF has yet to go live, with the market anxiously awaiting its arrival. Yet, the lack of staking features in the ETH option means less spot conversion, experts have stated. Additionally, the state of the market could further lessen interest in the product when it goes live.
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Ether ETF Demand to be Notable Lesser Than BTC
In January, Bitcoin’s Spot ETF approval changed the game for cryptocurrencies. It was a massive catalyst for the leading cryptocurrency’s surge to an all-time high of $73,000 just three months later. Yet, analysts are not expecting the same to take place for the second digital asset to get the investment product.
According to Bernstein analysts, the incoming Ethereum ETF will not garner the same demand as Bitcoin when it launches. “ETH should not see as much spot ETH conversion due to the lack of an ETH staking feature in the ETF,” the firm’s Gautam Chhugani and Mahika Sapra wrote.
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Although the product has been approved, there is no timetable for it to begin trading. The US Securities and Exchange Commission (SEC) approved a critical regulatory filing from issues last month, leading to rumors it could launch in July.
“ETH as a primary tokenization platform is building up a strong use-case, both for stablecoin payments, as well as tokenization of traditional assets and funds,” Bernstein added.” They also said that an “improved regulatory regime,” would be a benefit to ETH. Such a shift isn’t likely to come to fruition until the impending US presidential election in November.