Ether ETFs Could Trigger $4B Surge: ETFs Research Warns of Supply ‘Shock’

Ether ETFs Expected to Draw $4 Billion Inflows in First Five Months, Says K33 Research

Crypto News- In a recent report, crypto analytics firm K33 Research forecasts a substantial influx of $4 billion into Ethereum-based exchange-traded funds (ETFs) within the initial five months of their launch in the U.S. This estimation is grounded in comparisons between the assets managed in existing ETH-based ETFs globally and similar products for Bitcoin, along with analyzing the open interest in futures contracts on the Chicago Mercantile Exchange (CME), a prime marketplace for institutional investors.

Strong Institutional Interest: Key to Projected $3-4.8 Billion Inflows in Ether ETFs

K33 Research highlights that while Ether’s open interest on CME currently constitutes 23% of the size of BTC futures, it historically averaged at 35% since the inception of ETH futures trading on CME in 2021. This suggests considerable institutional demand for ETH in the U.S. Applying these ratios to the approximately $14 billion inflows into spot BTC ETFs so far, K33 projects ETH ETF inflows ranging between $3 billion to $4.8 billion in the initial five months.

Supply Crunch Looms: Forecasted Accumulation and Price Appreciation in Ether ETFs

This anticipated influx could potentially lead to a supply crunch for Ether, with an estimated accumulation of 800,000 to 1.26 million ETH in the ETFs, representing about 0.7% to 1.05% of the total token supply. Vetle Lunde, senior analyst at K33 Research, emphasizes the likelihood of price appreciation in ETH, drawing parallels with Bitcoin’s price surge following the introduction of U.S. spot ETFs.

Ether Set to Surpass Bitcoin: Impact of SEC Approval and Timing of ETF Launch

The report anticipates a reversal in the ETH-BTC pair’s downtrend, with Ether likely outperforming Bitcoin following the launch of Ether ETFs. The U.S. Securities and Exchange Commission (SEC) recently greenlit key filings for spot ETH ETFs, a move that caught many market participants by surprise. It’s expected that these ETFs will commence trading by late June or early July after completing necessary regulatory procedures.

Interestingly, the approved filings excluded provisions for staking assets in the fund, presumably to address regulatory concerns. Despite this omission, K33 asserts that it won’t hinder inflows into the ETFs, contrary to JPMorgan’s viewpoint, citing that the majority of assets under management in Canadian and European ETH ETFs are held in funds without staking.

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