Bitwise Chief Investment Officer (CIO) Matt Hougan made a bold prediction about the future of Ethereum ETFs. Hougan predicts spot Ethereum ETFs will attract $15 billion in net inflows in the first 18 months after launch in the US.
Hougan's prediction is based on a comparison of ETH's market cap to Bitcoin, data from international exchange-traded commodity markets, and the role of the carry trade. He noted that spot Bitcoin ETFs reached $15 billion in net inflows after just five months of trading.
Bitwise CIO expects investors to allocate to spot Bitcoin and Ethereum ETFs roughly proportional to their market caps, which are currently $1.2 trillion and $405 billion, respectively. This will result in a weighting of approximately 75% for spot Bitcoin ETFs and 25% for Ethereum counterparts.
Hougan expects that figure to reach at least $100 billion by the end of 2025, with more than $50 billion in assets managed through spot Bitcoin ETFs. This growth is expected as products mature and gain approval from platforms such as Morgan Stanley and Merrill Lynch.
Starting with that $100 million, spot Ethereum ETFs would need to attract $25 billion over 18 months to reach “parity,” according to Hougan. This figure does not include the $10 billion in assets that the converted Grayscale Ethereum Trust is expected to bring in on launch day.
Comparing data from the Bitcoin and Ethereum ETP markets in Europe and Canada shows that both have very similar assets under management ratios, at around 78% for Bitcoin and 22% for Ethereum products. This potentially lower market share led to a reduction in Hougan's forecast.
Hougan estimates that approximately $10 billion of spot Bitcoin ETF managed assets are linked to the carry trade. However, he does not expect spot Ethereum ETFs to follow the same dynamic and believes they should be removed from the calculations.
While some argue that Ethereum ETFs may underperform due to the lack of a native staking feature, Hougan dismisses this concern.
Taking all these factors into consideration, Bitwise lowered its estimate of net inflows into spot Ethereum ETFs to $15 billion. However, Hougan emphasizes that even $15 billion in net new demand would have a dramatic impact on the Ethereum market.
*This is not investment advice.
