Right now, everyone is waiting to see if the SEC approves the spot Ethereum ETF S-1 registrations, which might trigger a larger market upswing. According to K33 Research’s most recent analysis, about 1.26 million Ethereum are expected to be ready to be removed from exchanges five months after the ETF’s introduction, suggesting that Ethereum may be in for a supply shock. This might give the price of Ether (ETH) a significant boost, paving the road for it to reach a new all-time high.
Ethereum ETFs to Attract $4 Billion in Investments
According to K33 Research, spot Ethereum ETFs may attract an incredible $4 billion in inflows within the first five months of their inception. K33 Research made its prediction based on a comparison between comparable Bitcoin (BTC) products and the assets under management (AUM) of currently available Ethereum (ETH)- -based exchange-traded products globally. They examined the open interest (OI) in future contracts on the Chicago Mercantile Exchange (CME), a significant venue for institutional investors.
Right now, 23% of the size of Bitcoin futures is represented by Ether’s open interest (OI) on the CME exchange. However, since ETH futures began trading on CME in 2021, they have taken a 35% market share from BTC futures, suggesting that institutional demand for ETH has been very high.
K33 Research estimates that within the first five months of debut, the spot Ether ETFs may witness inflows ranging from $3 billion to $4.8 billion when comparing these ratios with the $14 billion inflows for the Bitcoin ETFs.
The current price of $3,800 for ETH could indicate that between 800,000 and 1.26 million ETH will be accumulated via ETFs. This represents between 0.7% and 1.05% of all ETH in circulation.
Ethereum Will Beat Bitcoin
The price of Bitcoin surged by 60% to all-time highs shortly after the spot ETF was approved. After nearly two years of underperformance, Ethereum is expected to outperform BTC if the Ethereum ETFs are made available for trade, according to K33 Research.
More significantly, it stated in its research report that withdrawing the staking function from exchange-traded funds (ETFs) would not harm the inflows into the investment vehicle. According to K33, 98% of assets under management in European products are held in funds that do not require staking, compared to 99% in Canadian ETH ETFs.
