The introduction of Ether spot ETFs in the U.S. is expected to drive the price of Ethereum (ETH-USD) to unprecedented heights, surpassing $5,000, according to Bitwise. This milestone might not be reached instantly, with some choppy price action anticipated initially due to outflows from the Grayscale Ethereum Trust as it converts to an ETF. Despite the rocky start, Bitwise’s chief investment officer, Matt Hougan, confidently predicts that new highs will be achieved by the year’s end. “By year-end, I’m confident the new highs will be in,” Hougan wrote. “If flows are stronger than many market commentators expect, the price could be much higher still.”
Comparing Bitcoin and Ethereum ETF Impacts
Interestingly, Bitwise highlights that the impact of Ethereum spot ETFs will surpass that of Bitcoin. Since the launch of Bitcoin spot ETFs in January, Bitcoin has seen a 25% increase, with a total surge of over 110% since the market began anticipating their launch last October. Bitwise believes that Ethereum’s structural factors, such as a 0% short-term inflation rate and the fact that 28% of ETH is staked and off the market, will lead to a greater impact.
Projected Inflows
The forecast for Ethereum spot ETFs is optimistic, with expectations of $15 billion in net inflows within the first 18 months. Steno Research supports this bullish outlook, predicting that Ethereum could reach at least $6,500 later this year due to these anticipated inflows and other market tailwinds.
An interesting anecdote from the world of finance: back in 2017, when Bitcoin futures were first introduced, many skeptics predicted a massive crash. Instead, Bitcoin’s price skyrocketed, catching everyone off guard. Similarly, the launch of Ethereum spot ETFs could defy expectations and drive ETH prices to new heights, proving skeptics wrong once again.
At the time of writing, Ethereum is sitting at $3,487.
Key Takeaway
In summary, while the journey to surpass $5,000 might have its initial turbulence, the launch of Ether spot ETFs is likely to largely boost Ethereum’s market value, potentially leading to even higher prices by the end of the year. As the market watches closely, the next few months will be important for Ethereum investors.
