The introduction of Ether exchange-traded funds (ETFs) is expected to bring significant investment inflows, potentially up to $10 billion, which could drive Ether prices to all-time highs by the end of the year, according to Tom Dunleavy, a managing partner at crypto investment firm MV Global. Dunleavy shared these insights with Cointelegraph, highlighting the anticipated impact of Ether ETFs on the market.
Expected Inflows and Price Impact
“We saw $15 billion in flows for Bitcoin. I think we’re probably going to see $5 billion to $10 billion for Ethereum,” Dunleavy said. “I expect a very positive price impact, sending us to new all-time highs by early Q4.”
Currently, eight spot Ether ETFs are awaiting final approval from United States regulators and are expected to begin trading soon, possibly as early as this month. These funds will join an existing lineup of around a dozen Bitcoin ETFs, which have collectively amassed approximately $15.9 billion since they began trading in January.
| ETF Type | Number of ETFs | Total AUM (Approx.) | Launch Date |
|---|---|---|---|
| Bitcoin ETFs | 12 | $15.9 billion | January 2024 |
| Ether ETFs | 8 (pending) | Estimated $5-10 billion | Expected July 2024 |
Dunleavy projects that ETH ETFs could attract around $1 billion per month in new inflows over the next few months. He pointed out that ETH is “less available on exchanges,” resulting in thinner order books and a more pronounced price response to buying demand compared to BTC.
“The BTC ETF led to a price appreciation of 36% from the January 10th launch date to the peak and over 50% from the time of initial speculation and rumors,” Dunleavy wrote in a Q2 investor memo shared with Cointelegraph. This historical performance serves as a basis for his optimistic outlook on ETH ETFs.
Appeal of Ether to Traditional Investors
Dunleavy believes that Ether’s appeal to traditional investors will be stronger due to its tangible cashflows and various applications, making it easier to market as a financial product compared to Bitcoin, which is often described as “digital gold.”
“ETH has cashflows. It can be described as a tech stock, the app store of crypto, or an internet bond […] This is a much easier sell for financial advisors than ‘digital gold,’” the memo stated.
Despite ETH’s lagging performance compared to BTC so far this year, with relatively deeper drops during market downturns, Dunleavy remains optimistic about its rebound potential. Data from Cointelegraph Markets Pro and TradingView support this analysis, showing ETH’s comparative underperformance.
However, Dunleavy cautioned that the anticipated rebound in ETH’s performance might not extend to other altcoins. He attributes this to a lack of overlap between institutional and retail markets in the crypto space.
According to Dunleavy, investors in Ether ETFs are likely to be different from those typically active in the on-chain crypto market. “Ether ETF investors are not going to be users who were onchain. They’re going to be users who were holding the stuff in their 401k,” he explained. This distinction underscores the varied investor profiles and their potential impact on market dynamics.
The imminent launch of Ether ETFs is poised to inject significant capital into the cryptocurrency market, potentially driving ETH to unprecedented highs. While regulatory approval is still pending, the market is optimistic about the positive outcomes associated with these new investment vehicles. As traditional investors enter the space, the landscape of digital asset investment is set to evolve, bringing new opportunities and challenges.
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