Final approval is awaited after the SEC gave initial approval to spot Ethereum ETFs last week.
At this point, while expectations regarding possible inflows to ETH ETFs differ, JP Morgan said that ETH ETF inflows will not meet expectations.
According to Coindesk, JP Morgan said in its latest report that spot Ethereum ETFs will likely see much lower demand than Bitcoin ETFs for a variety of reasons.
Stating that they expect Ethereum ETFs to attract net inflows of up to $3 billion this year, JP Morgan analysts argued that this figure could rise up to $6 billion if Staking is allowed in ETFs.
Analysts said that Bitcoin has a first mover advantage regarding ETFs and stated that the difference between Bitcoin and Ethereum is due to this advantage.
Analysts led by Nikolaos Panigirtzoglou included the following statements in the report:
“Bitcoin had a first-mover advantage, potentially saturating overall demand for crypto assets in response to spot ETF approvals.
However, Ethereum does not have the advantage that Bitcoin has. At this point, the lack of staking feature in spot ETH ETFs makes these ETFs less attractive compared to other platforms that offer staking returns.”
Finally, analysts stated that Grayscale's spot Ethereum ETF will have a negative impact on the ETH price, adding that “the market's initial reaction to the launch of spot ETH ETFs will likely be negative because those who purchased the Grayscale Ethereum Trust (ETHE) with the expectation of it being converted into an ETF “Speculative investors will likely sell and make a profit. According to our estimates, ETHE could see an outflow of $1 billion, which could put downward pressure on Ethereum prices.” said.
*This is not investment advice.