Spot Ethereum ETFs May Not Garner Expected Interest, JPMorgan Analysts Say
JPMorgan analysts have stated that spot Ethereum ETFs may not attract the anticipated interest due to their resemblance to existing Bitcoin ETFs. In a 25-page report titled “Flows and Liquidity,” Nikolaos Panigirtzoglou’s team highlighted the limited coverage given to ETH, which occupied less than a single page. The team also explained the reasons why Spot Ethereum ETFs may struggle to compete with Bitcoin ETFs.
Firstly, the analysts emphasized Bitcoin’s advantage as being the first cryptocurrency. Consequently, even if the approval for Spot Ethereum ETFs is granted, most of the demand has already been met by Bitcoin. The report also underlined another crucial point – Ethereum ETFs’ removal of the staking feature, as per the filings, puts them at a disadvantage compared to platforms that offer staking returns.
JPMorgan’s calculations suggest that if the ETF starts trading before the end of the year, it could see a volume of $1 billion to $3 billion in net inflows throughout the remainder of 2024.
Spot Bitcoin ETF Process May Repeat
According to data from The Block, the assets under management for spot Bitcoin ETFs were valued at $59 billion as of May 30. When spot Bitcoin ETFs commenced trading on January 10, Grayscale Bitcoin Trust’s assets under management (AUM) stood at $28.7 billion. On the other hand, Grayscale Ethereum Trust’s AUM was $11 billion as of Thursday.
Analysts cautioned that, similar to Grayscale’s Bitcoin product, Ethereum ETFs might experience comparable inflows once they become available for trading.
Please note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and associated risks of cryptocurrencies and should conduct their own research.