Today was a big day for Ethereum, the second-largest cryptocurrency by market cap, with the launch of eight ETFs tracking the ETH price.
This development is seen as a bullish moment for cryptocurrencies, with many industry commentators predicting that these funds will increase the price of ETH, similar to the success seen with spot Bitcoin ETFs.
Will Cai, Kaiko's Head of Indices, suggested in a report on Monday that “ETH price may be sensitive to entry numbers in the early days.” A full picture of demand may not emerge for several months, he added. Predictions of billions of dollars in inflows into spot ETH funds this year have been made by firms ranging from crypto market maker Wintermute to international banking giant Citi.
However, traders on prediction market Polymarket are less optimistic about the chances of ETH reaching a new all-time high thanks to these ETFs. Prediction markets, which allow geographically dispersed pools of users to make crowdsourced predictions about future events, are theoretically less biased because people are taking “risk on that prediction.”
Several live markets on Polymarket are currently accepting predictions on Ethereum price increase. With just under $780,000 in the largest prediction pool, 50% of forecasters are predicting “no ATH in 2024” for ETH. Nearly 30% believe ETH could rise above $4,600 by the fourth quarter.
In a separate pool, forecasters are betting that there is less than a 50% chance of ETH rising above $3,500 by July 26. Notably, BTC also experienced a decline in the days immediately after spot BTC ETFs began trading. The other two pools suggest that there is a 13% chance that ETH will climb to $10,000 by the end of the year, and an 8% chance that it will reach $15,000 in the same period.
*This is not investment advice.
