Crypto: A 30% plunge for Ethereum with the arrival of Spot ETFs

The crypto universe is in turmoil with the announcement of the imminent launch of spot Ethereum (ETH) ETFs. One of the most influential players in the sector, Andrew Kang, founder of Mechanism Capital, recently shared his predictions regarding the impact of this news on the price of Ether. According to him, Ethereum could suffer a drastic drop of 30%, sparking strong reactions and intense speculation among investors.

ETH crypto fall predictions

Andrew Kang sounded the alarm in an article published on June 23, where he predicted a significant drop in the price of the ETH crypto following the launch of spot ETH ETFs.

Currently, Ether is trading around $3,410, but Kang expects a drop to $2,400, a drop of around 30%. Unlike Bitcoin, ETH crypto does not benefit from the same level of institutional interest, which could limit the appeal of ETFs for this asset.

€20 bonus for registering on Bitvavo
This link uses an affiliate program

Indeed, the Mechanism Capital expert points out that the cash flows generated by the Ethereum network have not been impressive recently, and the incentives to convert ETH crypto into ETFs remain low.

This forecast contrasts sharply with previous peaks reached by Ethereum, which flirted with $4,000 last March, during Bitcoin's last all-time high.

Comparison with Bitcoin ETFs

Moon of the main reasons given by Kang to explain this pessimistic forecast is the comparison with spot Bitcoin ETFs.

According to him, spot Ether ETFs will attract only 15% of the flows observed for spot Bitcoin ETFs, which is within the 10 to 20% range estimated by Bloomberg ETF analysts.

In practice, this means that Ethereum ETFs could receive around $840 million in new capital inflows over the same period that Bitcoin ETFs attracted $5 billion.

This weak institutional appeal for Ethereum is exacerbated by a negative perception of its economic fundamentals.

Kang says the expectations of crypto natives are often disconnected from the preferences of institutional investors, reinforcing the idea that the Ethereum ETF might not be as popular as some hope.

Divergent Perspectives and the Future of Ethereum

Not all experts share Kang's pessimistic view. For example, Patrick Scott, aka Dynamo DeFi, believes that Ethereum ETFs could follow a similar trajectory to that of Bitcoin ETFs, without however predicting a doubling of the price of the crypto ETH.

Additionally, asset management firm Van Eck predicts that spot Ether ETFs could help bring Ether to $22,000 by 2030.

Despite these divergent perspectives, it is undeniable that Ethereum's future will depend on its ability to evolve and strengthen its economic fundamentals.

Ethereum's pitch as a decentralized financial settlement layer and platform for Web3 applications might appeal to some investors, but current data shows a less promising picture.

The arrival of Ethereum spot ETFs marks an important turning point for the crypto market. While some experts, like Andrew Kang, predict a 30% drop in the price of Ether, others see these new financial products as an opportunity for Ethereum to strengthen its position on the market. Meanwhile some investors are wondering whether to buy Nvidia stock or bitcoin.

Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.

Click here to join 'Read to Earn' and turn your passion for crypto into rewards!

Similar Posts