Cryptocurrencies

Ethereum ETF is coming and Bitwise is joining in: What does this mean for the market?


ETF applicant Bitwise has filed an amended S-1 registration with the U.S. Securities and Exchange Commission (SEC) for an Ethereum exchange-traded fund (ETF). Experts have previously predicted that this ETF could launch as early as July, subject to regulatory approval. If the green light is given in July, what would be the impact on the market?

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Ethereum ETF Could Attract Billions in Investment

On July 3, Bitwise filed an early amendment to its S-1 filing with the SEC, including a six-month waiver of fees of up to $500 million. While the exact launch date for listing and trading on NYSE Arca was not given, the filing stated that it would occur “as soon as practicable after the effective date.”

Source: https://www.sec.gov/Archives/edgar/data/2013744/000199937124008247/bitwise-s1a_070324.htm

According to Matt Hougan, Chief Investment Officer at Bitwise, investments in Ethereum would reflect the digital asset’s market cap. He pointed out that Bitcoin currently dominates 74% of the market cap, while Ethereum accounts for 26%. This ratio is important to consider when predicting fund flows into ETFs. For example, Hougan predicts that Ethereum ETFs would need to attract around $35 billion by 2025 to match Bitcoin’s success.

Influence on the market

Despite concerns about the lack of staking in Ethereum ETFs, Hougan believes that this will not affect demand much. He believes that staking revenues will only make up a small portion of Ether’s average annual return and that investors will be happy with exposure to the digital asset. a poll on the platform X Hougan got the following result:

While the outlook for Ethereum ETFs seems positive, some analysts are still skeptical that they will achieve the same level of success as Bitcoin. K33 researchers Vetle Lunde and David Zimmerman believe that Ethereum’s price could decline shortly after the ETFs launch, but that inflows into spot funds will likely boost its price over time.

Can Ethereum Surpass Bitcoin After ETF Launch?

The SEC’s sudden decision to approve Ether ETFs has sent the price of Ether soaring against Bitcoin. According to data from TradingView, the ETH/BTC price has risen to 0.05453. The prospect of an Ethereum ETF could be a significant step toward broader adoption and regulation of digital assets in the United States.

Ethereum is currently hovering above $2,900. Analysts believe that ETFs could be a strong catalyst for more buying pressure on Ether as we move further into the summer and funds pile up. Despite this optimistic outlook, the market remains cautious at this point.



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