The Chief Investment Officer (CIO) of Bitwise Asset Management, Matt Hougan, is bullish on the potential for spot Ethereum (ETH) exchange-traded funds (ETFs) to attract billions of dollars in inflows once approved by the U.S. Securities and Exchange Commission (SEC). In a recent memo to investors, Hougan predicts that ETH ETFs could bring in at least $15 billion in net flows within the first year and a half of launch.
Hougan’s estimate is based on various factors such as ETH’s market capitalization compared to Bitcoin, the performance of similar products in other markets like the UK and Canada, and the impact of the carry trade strategy. The carry trade strategy involves purchasing spot Bitcoin ETFs/ETPs and selling Bitcoin futures contracts to profit from the price difference. Despite these considerations, Hougan believes that there are additional drivers behind Ethereum’s growth, including the rise of stablecoins, regulatory clarity, and the benefits of the recent Dencun upgrade on the blockchain.
While Hougan acknowledges that his $15 billion prediction may be conservative, he emphasizes the transformative impact that even this level of new demand could have on the Ethereum market. He believes that ETH’s position as a fundamental asset powering a versatile blockchain makes it an enticing investment opportunity. With potential tailwinds such as a strong bull market for ETH, Hougan is optimistic about the future of Ethereum and expects it to outperform his initial projection.
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