Ethereum's Price After The ETFs Start Trading? Between $2,400 And $3,000, Says Crypto VC: Here's Why

Zinger Key Points
  • Crypto trader noted the success of Bitcoin Spot ETFs as it accumulated $50 billion in assets under management.
  • However, he expects lower net flows from Ethereum’s ETF as it lacks the broad institutional interest compared to Bitcoin.

Andrew Kang from crypto investment fund Mechanism Capital analyzed the potential impact of Ethereum ETH/USD ETFs, making a case for them underperforming Bitcoin BTC/USD ETFs.

What Happened: Kang highlights the success of Bitcoin ETFs in attracting new buyers and integrating Bitcoin into investment portfolios, pointing out that Bitcoin’s price surged 160% after BlackRock filed its application. Kang warns that the impact of an Ethereum ETF might not be as pronounced.

He predicts ETH might trade between $2,400 and $3,000 post-ETF launch, with a potential price increase if Bitcoin continues its upward momentum.

Bitcoin ETFs amassed $50 billion in Assets Under Management (AUM) but only accounted for $5 billion in net buying when adjusted for factors like the basis trade and spot conversions.

Kang projects significantly lower net flows for Ethereum. Estimates from ETF experts suggest ETH flows could be just 10% of Bitcoin’s, resulting in $0.5 billion in true net buying within 6 months. His analysis modifies this to a base case of $0.84 billion and an optimistic scenario of $1.5 billion in true net buying.

Benzinga Future of Digital Assets conference

Also Read: Will Ethereum Spot-ETF Approval Trigger A 30% Ether Price Drop? Bitcoin And Other Crypto-Related Stocks Reacting Negatively in Premarket Amid Fears

Why It Matters: Kang argues that Ethereum lacks the broad institutional interest that Bitcoin enjoys. "Ethereum is more of a tech asset that appeals to VCs, crypto funds, technologists, retail, etc., who aren’t as restricted in accessing crypto," he notes.

This intrinsic difference in market appeal, combined with ETH's lower Open Interest ($14.7 billion) compared to BTC ($33.3 billion), suggests weaker institutional demand for an Ethereum ETF.

Andrew Kang's analysis underscores a pragmatic view of an Ethereum ETF's impact, highlighting lower institutional enthusiasm and complex market dynamics. The Ethereum ETF might not generate substantial market movements immediately, contrasting sharply with Bitcoin’s experience. Investors should be prepared for modest flows and manage their expectations accordingly.

What’s Next: The influence of Ethereum as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next: Spot Ethereum ETFs To Go Live This Week? Analyst Outlines Possibility After Saying ‘No Reason For Delay’ Earlier

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Shutterstock

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