A new analysis by a Bloomberg ETF analyst suggests that the demand for spot Ethereum ETFs could potentially reach 20% to 25% of the demand seen for spot Bitcoin ETFs. The analyst, James Seyffart, discussed this perspective during an interview hosted by Bitwise, where he also mentioned that his colleague Eric Balchunas estimates the demand for Ethereum ETFs to be around 15% to 20%.
Seyffart compared these projections to the fact that Ethereum currently has about 30% of Bitcoin’s market cap, calling his estimate a “discount” in comparison. He attributed this difference to certain limitations of the products, such as the inability for ETF investors to engage in staking, unlike direct ETH holders who can earn yield. Additionally, Ethereum offers greater on-chain utility than Bitcoin, which ETF investors may not have access to.
In terms of Ethereum futures ETFs, Seyffart noted that they currently have only 12% of the assets compared to futures ETFs in the US, making them a less reliable sample for estimation. However, he pointed out that ETH futures ETFs in foreign markets have around 20% to 30% of assets compared to Bitcoin futures ETFs.
Looking ahead, Seyffart predicted that spot ETH ETFs would have significant launches, although not as large as spot Bitcoin ETF launches. Despite this, he expects there to be demand for these products.
Meanwhile, Bitwise CIO Matt Hougan anticipates significant demand for spot Ethereum ETFs as well, citing factors such as diversification strategies among investors and Ethereum’s appeal as a high-growth tech investment due to applications like stablecoins, DeFi, NFTs, gaming, and social apps.
The US SEC recently approved several rule changes that will allow exchanges to list and trade pending spot ETH ETFs. One of the approved proposals was NYSE Arca’s filing on behalf of Bitwise’s proposed fund. While the launch date remains unclear, some projections suggest that the products could be available before November.
Overall, analysts are optimistic about the potential demand for spot Ethereum ETFs, although the exact extent of this demand remains to be seen.
