Crypto fanatics eager for the market-shaking launch of an Ethereum spot ETF may be in for an underwhelming surprise, according to Bloomberg ETF analyst Eric Balchunas.
While the recent launch of a number of Bitcoin spot ETFs in the US has been a surprising success, Balchunas argues that Ethereum’s subsequent launches will be “small potatoes” compared to the original.
Is the Ethereum ETF important?
in Posted on On Saturday, Balchunas wrote:
“No offense to the ETH people, but this is very small potatoes compared to the spot Bitcoin ETF. It’s like the opening act starts after the headliner. Having a GenX band is like Sister Hazel trying to follow Nirvana.”
Balchunas explained that his prediction is based on anecdotal and public data that suggests the Ethereum ETF will be “nothing close” to its Bitcoin-based equivalent, which has attracted more than $7 billion in net flows since its launch on January 11. I did.
Prior to launch, asset managers were involved in a protracted legal battle with the Securities and Exchange Commission (SEC) to get a Bitcoin spot ETF approved for public stock exchanges due to wide disagreements over whether the Bitcoin market was vulnerable to external manipulation. It happened.
After Grayscale prevailed over the agency in court last year, the company quickly filed to launch an Ethereum spot ETF, followed by BlackRock and Fidelity, the three largest providers of Bitcoin spot ETFs today.
Ethereum VS Bitcoin ETF: What we know
While many are confident that the SEC will have to approve the product again, the question remains whether the market will want to buy it. For example, the Ethereum futures ETF launched in October last year but generated less flow and volume compared to Bitcoin’s first futures ETF in October 2021.
Looking at Canadian spot ETFs, the Purpose Ether ETF currently boasts AUM of $458 million CAD, while the company’s Bitcoin ETF boasts AUM of $2.5 billion. For context, Ethereum’s global market capitalization is roughly one-third the size of Bitcoin. That said, it may be relatively less popular than BTC within the ETF wrapper.
A Bitwise survey of registered investment advisors conducted last year found that 71% of advisors said they preferred Bitcoin over Ethereum.
In comments shared with CryptoPotato last November, the asset manager explained that an ETF would make more sense for Bitcoin than Ethereum as institutional investors are generally ignorant of the differences between the two assets.
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