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Bitwise CIO Expects $15 Billion To Flow Into Spot Ethereum ETFs, How Will ETH React?
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Bitwise CIO Expects $15 Billion To Flow Into Spot Ethereum ETFs, How Will ETH React?

Scott Matherson
Scott Matherson
1 year ago
3 mins read
Ethereum

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Bitwise’s Chief Investment Officer (CIO) Matt Hougan recently discussed the inflows the US Spot Ethereum ETFs could attract. Specifically, he stated how much could flow into these funds in their first 18 months of trading. 

Spot Ethereum ETFs To Record $15 Billion In First 18 Months Of Trading

Hougan mentioned in a note to investors that the Spot Ethereum ETFs could record $15 billion in net inflows in their first 18 months of trading. He elaborated on how he arrived at these figures to show that it wasn’t just a guess. First, Hougan highlighted the market capitalizations of Bitcoin and Ethereum and stated that he expects investors to allocate to their respective exchange-traded products (ETPs) in proportion to their market caps. 

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Hougan noted that US investors have, so far, invested $56 billion in Spot Bitcoin ETPs and expects that figure to reach $100 billion or more by the end of 2025, when these funds should have matured further and be approved on platforms like Morgan Stanley and Merrill Lynch. 

Using this as a reference, Bitwise’s CIO stated that the Spot Ethereum ETFs would need to attract $35 billion in assets to stay on par with the Bitcoin ETFs, which he believes could take about 18 months to happen. Hougan also highlighted that the Spot Ethereum ETFs will already have $10 billion in assets upon launch, thanks to the Grayscale Ethereum Trust (ETHE), which will convert to an ETF on launch day. 

Therefore, Hougan noted that the Spot Ethereum ETFs are now left with $25 billion in inflows to reach parity with the amount of inflows the Spot Bitcoin ETFs are expected to reach by 2025 year-end. Hougan then highlighted data from the international ETP markets to show that investors may be allocating to Bitcoin and Ethereum ETPs roughly in line with their market caps. 

Using The International Markets As A Point Of Reference

According to Hougan, Bitcoin and Ethereum ETPs in Europe hold €4,601 and €1,305 in assets under management (AuM), which translates to 78% and 22% of the aggregate available funds in both markets. Similarly, Bitcoin and Ethereum ETPs in Canada have $4,942 CAD (77%) and $1,475 CAD (23%) respectively. 

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Working with Ethereum’s ETP market share in Canada, Hougan estimated that the US Spot Ethereum ETFs could also get 22% of the US market. Based on this, Hougan lowered the estimate of net inflows for the Spot Ethereum ETFs from $25 billion to $18 billion, excluding Grayscale’s assets. 

Hougan eventually lowered the estimated net inflows to $15 billion by factoring in the fact that a significant portion of the flows into the US Spot Bitcoin ETFs are related to carry trades. He removed $10 billion of carry trade-related AuM from the Bitcoin market, lowering his estimates for Bitcoin from $100 billion to $90 billion and for the Spot Ethereum ETFs from $18 billion to $15 billion. 

ETH price chart from Tradingview.com (Spot Ethereum ETFs)
ETH price holding $3,300 | Source: ETHUSDT on Tradingview.com
Featured image created with Dall.E, chart from Tradingview.com
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Scott Matherson
Scott Matherson

Scott Matherson

Scott Matherson is a prominent crypto writer at NewsBTC with a knack for capturing the pulse of the market, covering pivotal shifts, technological advancements, and regulatory changes with precision. Having witnessed the evolving landscape of the crypto world firsthand, Scott is able to dissect complex crypto topics and present them in an accessible and engaging manner. Scott's dedication to clarity and accuracy has made him an indispensable asset, helping to demystify the complex world of cryptocurrency for countless readers.

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Scott’s experience spans a number of industries outside of crypto including banking and investment. He has brought his vast experience from these industries into crypto, which allows him to understand even the most complex topics and break them down in a way that is easy for readers from all works of life to understand. Scott’s pieces have helped to break down cryptocurrency processes and how they work, as well as the underlying groundbreaking technology that makes them so important to everyday life.

With years of experience in the crypto market, Scott began to focus on his true passion: writing. During this time, Scott has been able to author countless influential pieces that have drawn in millions of readers and have shaped public opinion across various important topics. His repertoire spans hundreds of articles on various sectors in the crypto industry, including decentralized finance (DeFi), decentralized exchanges (DEXes), Staking, Liquid Staking, emerging technologies, and non-fungible tokens (NFTs), among others.

Scott’s influence is not just limited to the countless discussions that his publications have sparked but also as a consultant for major projects in the space. He has consulted on issues ranging from crypto regulations to new technology deployment. Scott’s expertise also spans community building and contributes to a number of causes to further the development of the crypto industry.

Scott is an advocate for sustainable practices within the crypto industry and has championed discussions around green blockchain solutions. His ability to keep in line with market trends has made his work a favorite among crypto investors.
In his personal life, Scott is an avid traveler and his exposure to the world and various way of life has helped him to understand how important technologies like the blockchain and cryptocurrencies are. This has been key in his understanding of its global impact, as well as his ability to connect socio-economic developments to technological trends around the globe like no one else.

Scott is known for his work in community education to help people understand crypto technology and how its existence impacts their lives. He is a well-respected figure in his community, known for his work in helping to enlighten and inspire the next generation as they channel their energies into pressing issues. His work is a testament to his dedication and commitment to education and innovation, as well as the promotion of ethical practices in the rapidly developing world of cryptocurrencies.

Scott stands steady in the frontlines of the crypto revolution and is committed to helping to shape a future that promotes the development of technology in an ethical manner that translates to the benefit of all in the society.

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