Steno Research Expects $15-20B Inflows into Ether Spot ETFs, Predicts $6,500 Price Target
Net inflows into spot Ether exchange-traded funds (ETFs) could reach an impressive $20 billion within the first year, according to a recent report by Steno Research.
The research firm said Ether possesses qualities that appeal to Wall Street investors, claiming that the crypto market’s pessimism surrounding the forthcoming launch of spot ETH ETFs may be unwarranted.
“We continue to forecast a net inflow between $15 billion and $20 billion in the first 12 months, even considering the outflow from the Grayscale Ethereum Trust (ETHE),” senior analyst Mads Eberhardt stated in the report.
Eberhardt believes that this substantial influx of capital will not only drive up the value of ether in dollar terms but also position it favorably in comparison to Bitcoin.
Ether Could Hit $6,500 After ETF Launch
The report further predicts that ether could reach a minimum price of $6,500 by the end of this year, attributing this projection to the expected inflows into spot ETFs and other positive market factors.
The launch of spot ether ETFs in the U.S. is imminent following the recent approval of filings by issuers from the Securities and Exchange Commission (SEC).
Reports suggest that these new products could commence trading as early as next week once the S-1 filings receive final approval.
Steno Research indicates that if the projected inflows into spot Ether ETFs materialize, the ether/bitcoin ratio could strengthen to 0.065 by the end of the year.
The report highlights that due to lower market capitalization and liquidity compared to bitcoin, even a smaller inflow into ether ETFs would have a more significant impact on its value.
While Steno Research is optimistic about the outlook for spotEether ETF flows, other entities have different predictions.
Galaxy Research estimates $5 billion of net inflows into spot Ether ETFs within the first five months, while Bitwise Asset Manager anticipates $15 billion in net inflows within the initial 18 months.
Ether Could Drop to $2,400
Meanwhile, Andrew Kang, a founder and partner at Mechanism Capital, has said that the price of Ether could experience a significant drop to as low as $2,400 following the launch of spot ETFs.
According to Kang, Ether attracts less institutional interest compared to Bitcoin, and there are limited incentives for converting spot Ether into ETF form.
— Andrew Kang (@Rewkang) June 23, 2024
In terms of flows relative to spot Bitcoin ETFs, Kang expects spot Ether ETFs to attract around 15% of the flows seen by spot Bitcoin ETFs.
This estimation aligns with the range estimated by Bloomberg ETF analysts Eric Balchunas and James Seyffart, who suggest that spot Ether ETFs may attract 10-20% of the flows.
Notably, several prominent asset managers have submitted revised proposals for Ethereum ETFs to the SEC.
The filings by VanEck, BlackRock, Grayscale, Invesco Galaxy Digital, and Fidelity aim to provide updated information on their respective Ethereum funds, Eric Balchunas, an analyst at Bloomberg, noted.
VanEck’s filing disclosed a management fee of 0.20% for its Ethereum fund, which is in line with competitors like Franklin Templeton, charging 0.19% in management fees.
