The launch of exchange-traded funds (ETFs) that track the spot price of Ethereum (ETH) is expected to happen in the first week of July. Senior ETF analyst Eric Balchunas has noted that spot Ethereum ETFs might go live as early as July 2, with possible approval from the US Securities and Exchange Commission by July 4. Investors are eagerly anticipating the launch of these funds, with predictions that Ethereum’s price could react similarly to Bitcoin when spot Bitcoin ETFs were launched earlier this year.
Financial services provider Citi has analyzed the potential impact of the launch of spot Ethereum ETFs, projecting significant capital inflows into the coin. With net inflows into spot Bitcoin ETFs surpassing $13 billion between January and May, causing BTC’s price to skyrocket, Ethereum could see inflows ranging between $3.8 billion and $4.5 billion post-ETF launch. This could lead to a price increase of 23-28%, potentially pushing ETH to trade at $4,417 by November.
Some analysts believe that the launch of spot Ethereum ETFs could propel the coin’s price to $10,000 by the end of the year. Andrey Stoychev, the head of prime brokerage at Nexo, believes that these ETFs could help Ethereum catch up to Bitcoin’s performance post-ETF, reaching new highs. However, there is ongoing debate about the impact of ETFs on Ethereum’s staking activity, with concerns that withdrawals for ETF investment could lead to security issues on the network.
While some believe that the launch of ETFs could lead to increased staking yields as ETH moves from staking protocols to ETFs, others argue that the gains from ETF investment may not be worth missing out on staking rewards. Investors have staked 27.68% of ETH’s total circulating supply, and there are concerns that a shift from staking to ETF investment could leave the network vulnerable to attacks due to a decrease in the number of validators. It remains to be seen how the launch of spot Ethereum ETFs will impact the overall ecosystem of the cryptocurrency.
