Ethereum ETFs Could See Underwhelming Demand, Two Research Firms Predict

Wintermute, a significant market participant, anticipates ethereum-based ETFs attracting a maximum of $4 billion in investments from investors within the next year. This is significantly lower than the projected range of $4.5 billion to $6.5 billion by industry analysts, which itself represents approximately 62% less than the $17 billion amassed by bitcoin ETFs since their debut in the US six months ago.

Wintermute anticipates a potential increase of up to 24% for Ether’s price within the next year due to significant inflows.

Based on my extensive background in financial markets and experience with initial public offerings (IPOs), I can tell you that there are eight eager issuers poised to debut their products in the U.S. market as early as Tuesday. These include industry heavyweights like BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Bitwise, 21Shares, and Invesco. All of them have recently submitted their final documentation. This wave of new listings signifies a significant development in the growing digital asset sector and underscores the increasing institutional adoption of cryptocurrencies and other digital assets.

Research firm Kaiko shares a similar outlook based on previous Ethereum-focused launches.

In a recent report, Will Cai, the head of indices at Kaiko, expressed that the introduction of futures-based Ethereum Exchange Traded Funds (ETFs) in the US towards the end of last year was greeted with lackluster interest. However, there’s great anticipation surrounding the upcoming launch of spot Ethereum ETFs, with expectations of significant asset growth.

The price of ether is expected to be significantly influenced by the volume of inflows during the initial trading sessions, irrespective of the eventual market direction.

As a crypto investor keeping an eye on market trends, I’ve noticed some significant fluctuations in Ether’s implied volatility, according to data provided by Kaiko. Specifically, the volatility for contracts approaching expiry (July 26) spiked up from 59% to a striking 67%.

The report indicates a decrease in confidence regarding the Ethereum launch, as traders are more inclined to pay greater prices for protective wagers.

Last week, filings disclosed the anticipated management fees of various issuers, thereby removing one of the final obstacles towards gaining regulatory approval. Among them, Grayscale’s Ethereum Trust intends to levy a fee of 2.5% for investors, whereas most other managers maintain fees within the 0.15%-0.25% bracket.