The launch of spot Ethereum (ETH) exchange-traded funds (ETF) in the US next week is expected to push the price of the second-largest cryptocurrency above $5,000, an all-time high, according to crypto asset manager Bitwise.
Ethereum Spot ETF Inflows Will Push ETH Beyond $5K
In a published report, Bitwise chief investment officer Matt Hougan noted that the price increase may not be immediate and may be volatile initially due to outflows from the $11 billion Grayscale Ethereum Trust (ETHE) after it was converted into an ETF, but the long-term outlook is bullish.
Hougan expressed confidence that new highs will be reached by the end of the year, with the potential to reach even higher prices if inflows exceed market expectations.
The report highlighted that Bitcoin (BTC) is up 25% since the launch of spot ETFs in the US in January and is up more than 110% since October last year, when the market began pricing in the potential launch.
Bitwise believes Ethereum spot ETFs will have an even greater impact due to several structural factors.
First, Ethereum's short-term inflation rate is currently at 0% compared to Bitcoin's 1.7% at the time of the ETF launches.
This creates significant demand with zero supply. Additionally, unlike Bitcoin miners, Ethereum stakers are not required to sell, and 28% of ETH is staked, effectively removing it from the market.
Bitwise predicts that Ethereum spot ETFs will generate $15 billion in net inflows in the first 18 months of trading.
Supporting this optimistic forecast, a report published by Steno Research last month also predicts that ETH could reach at least $6,500 this year, driven by expected ETF inflows and other market headwinds.
*This is not investment advice.
