How Much ETH Will Spot Ethereum ETFs Purchase? Will Bitcoin’s Performance be Evident? Bloomberg Analysts Explain
Bloomberg analysts James Seyffart and Eric Balchunas expressed optimism regarding the potential demand for spot Ethereum ETFs. During an interview with Bitwise, Seyffart mentioned that he anticipates Ethereum ETFs to witness 20% to 25% of the demand observed by spot Bitcoin ETFs. Balchunas estimated that the demand would be around 15% to 20%.
Seyffart’s estimate, which he referred to as a “discount,” is based on the fact that Ethereum’s market capitalization stands at approximately 30% of Bitcoin’s $1.4 trillion market cap. He attributes the difference in demand to the limitations inherent in each product. Unlike Ethereum holders, investors of Ethereum ETFs will not be able to stake their holdings to generate returns. Furthermore, ETF investors will not have access to Ethereum’s advanced on-chain services.
“The gap between Ethereum within an ETF and Ethereum itself is slightly wider than the gap between Bitcoin within the ETF and the actual Bitcoin,” Seyffart explained.
Seyffart also highlighted that Ethereum futures ETFs, currently holding only 12% of assets in comparison to U.S. futures ETFs, do not serve as a reliable predictor. However, Ethereum futures ETFs in foreign markets hold approximately 20% to 30% of assets, which is commensurate with Bitcoin futures ETFs.
Despite these limitations, Seyffart predicts that spot Ethereum ETFs will experience “significant launches,” albeit not on the same scale as spot Bitcoin ETF launches. He concluded that there will be a demand for such products.
*Please note that this content is not intended as investment advice.