Hot on the heels of successful Bitcoin ETF approvals, Ethereum, the world’s second-largest cryptocurrency by market cap (currently around $3,540), is poised for a similar move. Applications from major players like the Chicago Board Options Exchange, Nasdaq, and NYSE to list Ether-based ETFs have been greenlit by the US Securities and Exchange Commission, opening the door for their launch in 2024.
With this increased accessibility, what does the future hold for Ethereum’s price? Ryan Lee, Chief Analyst at Bitget Research, offers insights on the potential impact of BTC vs. ETH ETFs with Bankless Times.
ETH ETF cash inflow at 2.5% of market cap
Lee says that assets under management (AUM) were stable at $60 billion from the approval of the spot Bitcoin ETFs in January to early June, which accounted for about 6% of the market cap at the time of approval. He predicts that the net cash inflow for an ETH ETF will be around 2.5% of its market cap, or about $11.55 billion.
He also believes that the fees for an Ethereum ETF will be similar to those for Bitcoin ETFs since they are the same type. If existing exchanges release their buying power and the current market does not shift towards ETH, the price could increase by approximately 22.69% to $4,724. This is very close to ETH’s all-time high of $4,878.26, reached on November 10, 2021. Ryan Lee’s estimate is based on 13.4 million ETH held by exchanges.
Will ETH reach a new all-time high after the launch of ETH ETFs?
After the approval of an Ether ETF, the price of Ethereum surged by over 30% to $3,800. Analysts are now expecting a new all-time high of over $5,000 in the near future.
David Brickell, a financial analyst at FRNT Financial, is predicting that both Bitcoin and Ethereum will reach all-time highs by the end of June. A positive economic outlook and the approval of a spot Ethereum ETF indicate strong support for the two largest cryptocurrencies in the world in the coming weeks.
Brickell mentioned that he wouldn’t be surprised to see new all-time highs, with Bitcoin reaching $80,000 and Ether reaching $5,000.
Furthermore, the net inflows and outflows of the BTC spot ETF could have an impact on the entire market. A significant inflow of funds could drive up the price of Bitcoin, while a notable outflow of funds could cause the price of Bitcoin to drop. Currently, BTC ETFs are experiencing consistent fund inflows, providing stable support for the price of Bitcoin.
