Matt Hougan, Chief Investment Officer at crypto asset manager Bitwise, has stated that spot Ethereum exchange-traded fund (ETF) inflows could have a more significant impact on ether (ETH) upon launch than similar products had on bitcoin (BTC).
In a client note on Tuesday, Hougan predicted that spot Ethereum ETF inflows could push ether prices to all-time highs above $5,000, though he expects initial market volatility.
Hougan anticipates the first few weeks following the launch of Ethereum ETFs to be “choppy” for ether, as funds may flow out of the $11 billion Grayscale Ethereum Trust (ETHE) upon its conversion to a spot ETF. Despite this anticipated turbulence, he expressed confidence that new highs would be reached by year-end. “If flows are stronger than many market commentators expect, the price could be much higher still,” Hougan added.
On May 23, the Securities and Exchange Commission (SEC) approved eight 19b-4 forms for spot Ethereum ETFs from Bitwise, BlackRock, Fidelity, VanEck, Ark Invest, Invesco, Franklin Templeton, and Grayscale. However, these issuers still need their S-1 registration statements to become effective before trading can commence, which sources indicated to The Block could happen by July 23.
ETF Flows Impact on Ether Compared to Bitcoin
Hougan noted that while spot ETFs do not alter the fundamentals of an asset like ether, they introduce new sources of demand. He highlighted the impact of spot Bitcoin ETFs, including Bitwise’s BITB, which collectively purchased 263,965 BTC since their launch, compared to the 129,281 BTC produced by bitcoin miners during the same period—more than double the output.
Bitcoin has seen a roughly 40% price increase since the ETFs launched on January 11, and more than 100% since the market began pricing in their approval in October 2023. Hougan expects the impact on ether to be even greater, emphasizing the potential for substantial market movement.
Previously, Hougan projected that spot Ethereum ETFs would attract $15 billion in net inflows within their first 18 months. This projection suggests a slower pace compared to Bitcoin ETFs, which achieved the same net inflow milestone in just five months of trading.