The launch of spot ether (ETH) exchange-traded funds (ETFs) in the U.S. is expected to have a significant impact on the price of the cryptocurrency, pushing it to all-time highs above $5,000, according to a report by Bitwise. This development is anticipated to occur next week and could lead to a surge in the value of Ether, the second largest cryptocurrency in the market.
While the immediate impact of the ETF launch may not be instantaneous, with potential volatility due to money flowing out of the Grayscale Ethereum Trust, Chief Investment Officer Matt Hougan is confident that new highs will be reached by the end of the year. In the report, it is mentioned that bitcoin saw a 25% increase in value following the launch of spot ETFs in the U.S. earlier this year, showing the potential positive effect of such products on cryptocurrency prices.
Bitwise highlights three structural reasons for why the money flowing into new ether spot ETFs will have a larger impact than it did for bitcoin. These reasons include Ether’s 0% short-term inflation rate, the fact that ETH stakers do not have to sell like bitcoin miners do, and that a significant portion of ETH is staked and unavailable for sale in the market. As a result, the demand for Ether is expected to meet a limited supply, potentially driving prices higher.
The report suggests that Ether spot ETFs are likely to be successful and could attract $15 billion of net inflows in their first 18 months of trading. This positive outlook is also shared by Steno Research, which predicts that Ether could reach at least $6,500 later this year due to expected inflows to spot ETFs and other favorable market conditions.
Overall, the launch of spot ether ETFs in the U.S. is anticipated to have a significant impact on the price of the cryptocurrency, potentially pushing it to new all-time highs above $5,000. With strong demand meeting limited supply and positive market sentiment, both Bitwise and Steno Research are bullish on the future performance of Ether, expecting considerable net inflows and price appreciation in the coming months. Investors and traders in the cryptocurrency space should keep a close eye on developments surrounding spot ETFs and market trends to capitalize on potential opportunities for growth and profit.
