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Bitcoin:
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BTC Dominance:
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Market Cap:
$2.34 T

Institutional Demand for Ethereum ETFs Might Fall Short!

Ethereum Pectra

Bloomberg Intelligence ETF analyst Eric Balchunas predicts that Ethereum ETFs will see less demand compared to Bitcoin ETFs.

After the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin exchange-traded funds (ETFs), Bitcoin surged to new highs, attracting over $12 billion from institutional investors. However, Ethereum investors might not experience the same enthusiasm for their ETFs.

Analyst Predicts Failure for Ethereum ETFs Despite SEC Approval

Noelle Acheson, former head of market insights at Genesis Global Trading, highlights various indicators showing a significant decline in institutional interest for Ethereum compared to Bitcoin. Echoing this sentiment, Bloomberg Intelligence ETF analyst Eric Balchunas forecasts that Ethereum ETFs will capture only 10-15% of the assets drawn by Bitcoin ETFs.

Previously, the SEC resisted approving spot crypto ETFs due to manipulation concerns. However, after losing a lawsuit to crypto asset manager Grayscale Investments, the SEC approved 11 spot Bitcoin ETFs in January.

This week, the SEC marked a significant shift by approving spot Ethereum ETFs amidst a wave of crypto-friendly developments in the U.S.

Despite this approval, Acheson warns that the launch of Ethereum ETFs may not trigger the same level of excitement as Bitcoin ETFs did. Institutional investors have shown limited interest in existing Ethereum-based products. In Hong Kong, Ethereum comprises less than 15% of the assets under management for the newly approved spot Bitcoin and Ethereum ETFs.

In the U.S., Ethereum futures ETFs also trail behind their Bitcoin counterparts, with the leading ETH futures ETF managing only 4% of the assets of the top BTC futures ETF. Acheson notes similarly low interest in Ethereum derivatives from institutional investors.

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CME Group, a major derivatives exchange, ranks Ethereum derivatives fifth in open interest, significantly behind Bitcoin derivatives. This indicates that U.S. institutional investors may not be as engaged with Ethereum.

However, some industry professionals remain optimistic about Ethereum’s potential. Investor Jim Bianco believes that Ethereum’s extensive ecosystem, which includes borrowing, lending, insurance, tokenomics, staking, stablecoins, NFTs, and more, could attract significant interest from Wall Street with regulatory clarity on its proof-of-stake mechanism.

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