Ethereum ETF inflows: Will Bitcoin and other cryptocurrency prices rise as a result?

The growing phenomenon of Ethereum Exchange-Traded Funds (ETFs) has captured the attention of both institutional and retail investors. But how will these ETF inflows affect the prices of Bitcoin and other cryptocurrencies? Let’s look at the possible scenarios.

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Positive sentiment turnaround for Ethereum

Following the approval of spot Ethereum ETFs by the Securities and Exchange Commission (SEC), there is a positive shift noted in investor sentiment. Ethereum saw a turnaround with net flows after the approval, breaking a 10-week period of $200 million outflows. This recent inflow of approximately $36 million highlights investors’ renewed interest in Ethereum.

New capital versus capital shift

The question remains whether this influx of capital attracts new capital or simply shifts capital from Bitcoin to Ethereum. Analysts predict significant new capital flows into these ETFs, with estimates that the new Hong Kong crypto products, including Ethereum ETFs, could see around $1 billion in net flows in their first year or two. This suggests that transferring capital into Ethereum ETFs will not come at the expense of Bitcoin ETFs, which are also seeing strong inflows.

Price implications

The impact on prices will depend on the balance between new ones capital flows and the possible shift from Bitcoin to Ethereum investments. If the inflows are mainly new capital, it could put upward pressure on both Bitcoin and Ethereum prices. On the other hand, if there is significant capital shifting, Bitcoin could potentially rise more slowly against Ethereum.

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