ETH ETFs To Push Price To ATHs!

As the spot Ethereum ETFs makes its debut on the US exchanges, Citi predicts a substantial inflow volume in six months, while analysts project an Ethereum rally to a new ATH.

The much-anticipated spot Ethereum ETFs have finally made their debut on US exchanges, sparking anticipation of a substantial inflow volume and projections of an Ethereum rally to a new ATH.

According to a recent CNBC report, Citi predicts that these ETFs could see inflows of up to $5.4 billion in the next six months. This significant amount underscores the growing interest in regulated crypto investment vehicles, especially following the launch of spot Bitcoin ETFs that witnessed inflows of around $17 billion within six months.

Meanwhile, as institutional money begins to flow in, analysts are projecting ETH could reach the $5,000 mark this year. Amidst the debut of spot Ethereum ETFs, ETH trades around $3,450, down over 1% in the past 24 hours.

Bitwise Chief Investment Officer Matt Hougan has stated that while the US spot Ether ETFs will have a rough start, they could have a bigger impact on the asset’s price than Bitcoin ETFs did for BTC.

“In our view, the launch of the US spot Ether ETFs will have a smaller impact on ether’s price, at least initially, than the approval of bitcoin futures ETFs had on bitcoin’s price,” Hougan stated.

In a report, the Bitwise chief investment officer wrote that while the first few weeks could be choppy due to money flowing out of the $11 billion Grayscale Ethereum Trust (ETHE) as it converts to an ETF, by the year-end the new highs will be in. He added not to expect significant results immediately given the potential selling pressure similar to what spot Bitcoin faced on its launch.

“Don’t expect anything spectacular immediately, but by the year-end you’ll be looking at new all-time highs for ether,” Hougan added.

Bitwise stated that the money flowing into new ether spot ETFs will have a larger impact than it did for Bitcoin for three structural reasons. Ether’s short-term inflation rate is 0% and when bitcoin versions launched the network’s inflation rate was 1.7%, so there is significant demand meeting zero supply. Unlike Bitcoin miners, ETH stakers don’t have to sell, and 28% of ETH is staked and therefore off the market.

Ether spot ETFs are expected to garner $15 billion of net inflows in their first 18 months of trading, the report added.

While Hougan is optimistic about Ethereum reaching $5,000 and beyond by the year’s end, futures traders are betting on a near-term decline in Ethereum’s price.

Moreover, the SEC’s position on not allowing staking Ether within ETFs poses a potential headwind for adoption. Historically, approvals reportedly relied on the jurisdictional hook of futures trading, which, according to CNBC, Ethereum and Bitcoin lack.