Minority Mindset

Smart investments

Crypto News

Ether Spot ETFs Could See Lower Demand Compared to Bitcoin Peers: Bernstein

Jun 24, 2024
  • Ether spot ETFs are expected to see less demand than bitcoin versions, the report said.
  • The lack of a staking feature in ether ETFs means less spot conversion, the report said.
  • Bernstein said that despite the recent pullback in crypto markets institutional adoption continues to grow.
As a researcher with experience in the crypto market, I believe that the demand for Ether (ETH) spot Exchange-Traded Funds (ETFs) will be lower than that of Bitcoin (BTC) ETFs. The lack of a staking feature in ether ETFs is a significant factor that reduces the need for spot conversion. Although institutional adoption of crypto continues to grow, the recent pullback in crypto markets doesn’t change my perspective on the structural adoption cycle remaining intact.In a recent research report published on Monday, Bernstein predicted that the demand sources for Ether (ETH) spot exchange-traded funds (ETFs) will be similar to those of Bitcoin (BTC) ETFs once they are approved for trading. However, the volume or scale of this demand is expected to be lower.
As a crypto investor, I’d interpret their analysis as follows: Since there isn’t an ETH staking feature in the Ethereum ETF, less ETH is expected to be converted into spot form. Instead, the basis trade – which entails purchasing the spot ETF and selling the corresponding futures contract simultaneously – will likely attract investors. This trade strategy involves waiting for the prices of the ETF and the underlying futures contract to align. The execution of this trade should ultimately bolster liquidity within the ETF market.

As a crypto investor, I’m excited to share that we’re on the brink of being able to invest in Ether Exchange-Traded Funds (ETFs) right here in the United States. The Securities and Exchange Commission (SEC) recently gave its approval to regulatory filings from issuers, bringing us one step closer to making this a reality.

“The authors noted that Ethereum (ETH), serving as a leading tokenization platform, is gaining a robust application, encompassing stablecoin transactions and the digital representation of conventional assets and funds.”

As a researcher studying the field of digital assets, I believe that a more advanced regulatory framework is necessary for the effective management and growth of assets like Ether. I anticipate that the discourse surrounding the U.S. elections later this year will become more favorable towards digital assets due to the increasing likelihood of a Republican victory and the fact that President Trump has expressed support for cryptocurrencies.

As a crypto investor, I’ve noticed the recent downturn in the market, but I remain optimistic about the long-term trend. The structural adoption cycle for cryptocurrencies is still in place, according to the report. This means that despite short-term fluctuations, the underlying fundamentals supporting the growth and acceptance of crypto are still strong.

Last month, JPMorgan, a major player on Wall Street, predicted that demand for spot ether Exchange-Traded Funds (ETFs) would be significantly lower than that of bitcoin ETFs. The bank explained that Bitcoin had the advantage of being the first cryptocurrency to gain widespread popularity and adoption, which could potentially meet and even exceed the total demand for crypto-based ETFs in the market.

Read More

2024-06-25 13:20