A recent industry report suggests that Ether (ETH) spot exchange-traded funds (ETFs) in the U.S. could attract between $4.7 billion and $5.4 billion in net inflows during their initial six months. This amount is expected to be 30%-35% of what Bitcoin ETFs have garnered.
Despite these optimistic projections, the report warns of potential disappointments due to factors like the absence of staking options and Bitcoin’s established advantage as the first mover in the ETF market.
Analysts point out that while Ether offers diversification benefits over the long term, its potential is currently not fully realized. Approval for Ether spot ETFs was recently granted, with trading set to commence soon.
Investors might view Bitcoin and Ether as similar assets, potentially splitting their allocations between the two rather than making distinct investments. This could mean that Ether ETFs attract funds initially intended for Bitcoin ETFs rather than generating entirely new investments.
The lack of staking options for Ether ETFs is another factor that could limit inflows. Bitcoin’s strong performance and substantial inflows prior to Ether ETF approvals also set a high benchmark.
On a positive note, the launch of Ether spot ETFs coinciding with a more accommodative Federal Reserve could lead to a supportive macroeconomic environment. This includes lower interest rates, a stronger equity market, and a weaker U.S. dollar, all of which could benefit the cryptocurrency sector and support these new ETFs.
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