Following the recent approval of the Spot Ethereum ETFs last month, one analyst has predicted that the investment vehicle will capture as much as 20% of Spot Bitcoin ETF flows. Indeed, cryptocurrency exchange Bitfinex’s head of derivatives, Jag Kooner, predicted the performance of the ETH offering.
Both Ethereum and Bitcoin represent the only two crypto-based ETFs in the United States. Moreover, since its approval in January, BTC has had one of the most successful exchange-traded products in the country’s history. Now, there is the expectation that Ethereum could capture a fifth of the flows going into the Bitcoin offering.
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Ethereum ETF to Capture 10%–20% of Bitcoin ETF Flows
With the midpoint of 2024 fast approaching, the year has seen the digital asset sector climb to the forefront. Dominating discussions within finance, crypto-based ETFs have been a massive part of the ongoing discourse. As the second such opinion prepares to go live, the market is observing what its debut could look like.
Moreover, they are beginning to question what effect its debut could have on the cryptocurrency industry as a whole. With Bitcoin proving to be immensely successful just five months after its launch, the presence of a secondary offering has undoubtedly become a point of interest.
According to one expert, the recently approved Spot Ethereum ETFs could capture a significant portion of Bitcoin ETF flows. Specifically, Bitfinex Jag Kooner noted that the offering could acquire as much as a fifth of the overall flows into the digital asset investment offering.
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“Forecasts show that spot Ethereum ETFs could capture between 10 and 20% of the flows that have been going into spot Bitcoin ETFs,” Kooner told The Block. “The launch of gold ETFs offers a historical parallel, as when new gold ETFs were introduced, they attracted significant investment,” Kooner added.
The debut of those new gold ETFs, historically, affected the inflows in investment products that already existed. Kooner remarked, “Similarly, the introduction of Ethereum ETFs could see fund managers reallocating resources to balance their exposure to both Bitcoin and Ethereum.”