Crypto: Ethereum ETFs set to capture $15 billion by 2025

The Ethereum ETF market is poised for meteoric growth, according to Matt Hougan, chief investment officer at Bitwise. According to its forecasts, these new financial products could attract up to $15 billion in investments within 18 months of their launch. This estimate is based on an in-depth analysis of market potential and trends observed in the crypto sector.

Considerable growth potential for Ether ETFs

The growing appeal of Ethereum as an institutional investment is reflected in Bitwise's projections. Hougan anticipates that Ether ETFs could represent around 26% of the combined Bitcoin-Ethereum market.

This significant partexplain by the current market capitalization of the second crypto, which stands at $432 billion, suggesting significant potential for capital inflows.

The launch of Ethereum ETFs will benefit from a significant advantage: the expected conversion of the Grayscale Ethereum Trust into an ETF, immediately bringing $10 billion in assets. This solid foundation could boost investor confidence and accelerate the adoption of these new financial products.

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Forecasts adjusted to market realities

Although the outlook is promising, Hougan takes a cautious approach in his estimates. It takes into account some limiting factors, such as the slight underperformance of Ethereum ETPs relative to their absolute market capitalization weighting. This nuance led him to revise his initial expectations from 25 billion dollars to 18 billion, excluding assets of the Grayscale trust.

Another element taken into consideration is the probable absence of “carry trade” for Ethereum ETFs, unlike what is observed with Bitcoin.

This particularity, due in particular to the absence of staking for American Ethereum ETFs, pushed Hougan to further refine his projections, resulting in the final estimate of $15 billion in net inflows.

Bitwise's optimism comes amid an increasingly favorable regulatory context. Recently, VanEck, another major asset management player, filed Form 8-A for its proposed Ethereum ETF, signaling increased confidence in the SEC's upcoming approval of these products.

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