How Ethereum ETF Inflows Will Impact Bitcoin And Cryptocurrency Prices

Zinger Key Points
  • Upward price pressure on Ethereum and Bitcoin will depend on the balance of new capital versus fund shifts.
  • The Benzinga Future of Digital Assets event will discuss ETF impacts on digital assets with insights from industry leaders.

Benzinga has investigated the impact of spot Ethereum ETFs on Bitcoin BTC/USD and Ethereum ETH/USD prices and potential size of inflows to provide investors with a better understanding of future market dynamics.

Expected Inflows and Market Dynamics

The approval of spot Ethereum ETFs has already begun to shift investor sentiment positively.

Data indicates that Ethereum saw a turnaround with net inflows following the SEC approval, breaking a 10-week streak of outflows that totaled $200 million.

Inflows for Ethereum reached approximately $36 million recently, underscoring renewed investor interest​​.

Will It Be New Capital?

The influx of capital into Ethereum ETFs is expected to attract both retail and institutional investors, providing a regulated and secure means to invest in Ethereum.

Analysts predict significant new capital flowing into these ETFs.

For instance, Bloomberg Intelligence forecasts that the new Hong Kong crypto products, including Ethereum ETFs, could see about $1 billion in net inflows in their first year or two.

Given the larger scale of the U.S. ETF market, the inflows for U.S.-based Ethereum ETFs could be substantially higher​.

Also Read: Bitcoin Spot ETFs Record $887M Inflow On Wednesday, Second-Highest Ever

Potential Impact On Bitcoin

There is a concern that the new capital flowing into Ethereum ETFs might cannibalize the inflows that would otherwise go into Bitcoin ETFs.

However, the data suggests a more nuanced picture.

Bitcoin ETFs have also seen strong inflows, with products like BlackRock's iShares Bitcoin Trust IBIT leading the way with $720 million in net inflows recently.

This indicates robust investor appetite for both cryptocurrencies​.

Price Implications

The impact on prices will depend on the balance between new capital inflows and the potential shift from Bitcoin to Ethereum investments.

If the inflows are primarily new capital, we could see upward pressure on both Bitcoin and Ethereum prices.

Conversely, if there is significant cannibalization, Bitcoin might experience slower price appreciation relative to Ethereum.

The upcoming Benzinga Future of Digital Assets event on Nov. 19 will be a key forum to discuss these developments.

Industry leaders will offer their insights on the evolving dynamics of digital assets, providing valuable perspectives on how these ETF inflows might shape the market in the coming months.

Read Next: Mike Novogratz Predicts Bitcoin To $100K By The End Of 2024

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