Bloomberg ETF analysts James Seyffart and Eric Balchunas expressed optimism about the potential demand for spot Ethereum ETFs.
In an interview hosted by Bitwise, Seyffart stated that he expects Ethereum ETFs to see 20% to 25% of the demand experienced by spot Bitcoin ETFs. Balchunas estimates that demand will be around 15% to 20%.
Seyffart's estimate, which he calls a “discount,” is based on the fact that Ethereum's market cap is about 30% of Bitcoin's $1.4 trillion market cap. He attributes the difference in demand to the limitations of each product. Unlike Ethereum holders, Ethereum ETF investors will not be able to stake to generate returns. Additionally, Ethereum's advanced on-chain services will not be accessible to ETF investors.
“The gap between Ethereum within an ETF and Ethereum itself is slightly wider than the gap between Bitcoin within the ETF and the actual Bitcoin,” Seyffart said.
Seyffart also noted that Ethereum futures ETFs, which currently hold only 12% of assets compared to U.S. futures ETFs, do not provide a “good proxy” for a prediction. However, Ethereum futures ETFs in foreign markets hold 20% to 30% of assets commensurate with Bitcoin futures ETFs.
Despite these limitations, Seyffart predicts spot Ethereum ETFs will have “major launches,” though not as large as spot Bitcoin ETF launches. “There will be demand,” he concluded.
*This is not investment advice.