Spot ether ETFs will start trading today after receiving final approval from the US Securities and Exchange Commission. This decision gives Americans easy access to the second-biggest crypto by market cap.
According to leading market maker Wintermute, the ether ETFs could attract inflows of up to $4 billion from investors over the next year. Most analysts expected $4.5-$6.5 billion. Moreover, this value is 62% less than the inflows spot Bitcoin ETFs generated in the past six months. Despite this negative prediction, Wintermute expects ether’s price to increase by as much as 24% next year.
The SEC’s approval caps a lengthy process and follows the regulator’s approval of Bitcoin ETFs in January. Conventional investors might now find ether more attractive because they can buy and sell it through traditional brokerage accounts.
Ether ETFs to underperform Bitcoin
Analysts with a more optimistic outlook still anticipate that inflows into ether ETFs will not reach the same levels as those seen with Bitcoin-focused counterparts. Steno Research estimates that the new ETFs may receive $15-$20 billion in inflows over the next year, a stark contrast to the $15-$20 billion that Bitcoin ETFs accrued in just seven months.
Ethereum lacks the “first-mover advantage” and does not possess the “digital gold” narrative that has contributed significantly to Bitcoin’s attraction to investors.
Kaiko, a research firm, shares a similarly pessimistic perspective based on previous launches focused on Ethereum. When futures-based ether ETFs were launched in the US last year, demand was described as “underwhelming” by Will Cai, the head of indices at the company. Despite long-term trends, the price of ether is likely to respond to inflow data in the initial trading days.
According to Kaiko data, implied Ether volatility surged over the weekend, with contracts expiring on July 26 climbing from 59% to 67%. This indicates reduced confidence in today’s launch, as traders are prepared to pay more to protect their positions.
Ethereum price action
Ether is up around 2% over the last 24 hours at the time of writing, but it has rallied nearly 88% so far this year. Moving averages indicate a strong buy. It’s currently trading for $3,518, while the Fibonacci pivot point is at 3,517.
The price is roughly the same as the Fibonacci pivot point, so the latter might act as a resistance level. Ether will face selling pressure if it struggles to rise above this point. The next resistance is at 3,767.7.
