According to Bitwise Chief Investment Officer Matt Hougan, United States spot Ether exchange-traded funds (ETFs) are anticipated to face a challenging start but could potentially have a more significant impact on Ethereum’s price compared to Bitcoin ETFs on BTC. Hougan highlighted that initial trading weeks might be turbulent, possibly due to capital outflows from the $11 billion Grayscale Ethereum Trust (ETHE) as it transitions to an ETP (Exchange-Traded Product).
Hougan expressed confidence that by the end of the year, ETH ETFs could drive Ethereum to new price highs, despite cautioning against expecting immediate substantial results. He cited three key reasons supporting his belief in the potential impact of ETH ETFs: Ethereum’s low inflation rate, driven by extensive use of Ethereum-based applications relative to the daily creation of ETH; contrasting cost dynamics between Bitcoin mining operations, which require substantial energy and expenses, versus ETH staking, which involves lower direct costs; and approximately 28% of ETH being staked and thus removed from circulation, effectively reducing market supply.
The launch of the spot Ether ETF is scheduled for July 23, as reported by Bloomberg ETF analyst Eric Balchunas. Hougan forecasts that this development could propel Ether’s price above $5,000 by the end of 2024, representing a 47% increase from its current value around $3,401 according to CoinMarketCap data.
