Crypto enthusiasts anticipating a groundbreaking Ethereum spot ETF launch may need to temper their expectations, as Bloomberg ETF analyst Eric Balchunas suggests that the launch may not live up to the success of Bitcoin spot ETFs. Balchunas believes that the Ethereum ETFs are likely to be overshadowed by their Bitcoin counterparts, which have seen significant inflows since their launch in January.
Despite the efforts of asset managers to secure approval for Bitcoin spot ETFs from the SEC, the prospect of an Ethereum spot ETF may not generate the same level of interest among investors. Balchunas’s assessment is based on data suggesting that the Ethereum ETFs may not see the same level of success as Bitcoin ETFs, given the relatively lower market cap of Ether compared to Bitcoin.
The launch of Ethereum futures ETFs last year did not attract significant flows or trading volume compared to Bitcoin futures ETFs, indicating potential challenges for an Ethereum spot ETF. While the SEC may ultimately approve the product, there are doubts about the level of demand from investors.
Market Comparison: Bitcoin vs. Ethereum
When comparing Canada’s spot ETFs, the Purpose Ether ETF has a much smaller AUM compared to the company’s Bitcoin ETF, reflecting the relative popularity of Bitcoin over Ethereum in the market. Additionally, a Bitwise survey from last year showed that a majority of investment advisors preferred Bitcoin over Ethereum, further highlighting the challenges facing an Ethereum spot ETF launch.
The prospects for a successful Ethereum spot ETF launch may be limited, given the historical performance of Ethereum ETFs compared to Bitcoin ETFs. While there is optimism that the SEC may approve the product, the level of investor interest remains uncertain. As the cryptocurrency market continues to evolve, it will be important to closely monitor the developments surrounding Ethereum spot ETFs and their potential impact on the market.