Spot Ether ETF Inflows Expected to Impact Price Sensitivity, Says Kaiko
The launch of spot Ether ETFs is set to shake up the crypto market in the coming days, with analysts predicting a sensitive response from investors. According to crypto analytics firm Kaiko, the price of Ether could be heavily influenced by the inflows into these new ETFs.
Kaiko’s head of indices, Will Cai, highlighted the lackluster demand for ETH futures products late last year, setting the stage for a potentially volatile reaction to the spot ETFs. With several spot Ether ETFs receiving final approval and set to start trading on July 23, all eyes are on the market to see how investors will respond.
One key factor to watch is the potential outflows from Grayscale’s Ethereum Trust (ETHE), which is expected to see a shift as traders look to cash out following the switch to a spot product. The narrowing discount on ETHE shares suggests that investors are gearing up to redeem their shares at NAV price, potentially impacting the overall price of Ether.
While some analysts are optimistic about the potential inflows into Ether ETFs, others are more cautious. Market maker Wintermute predicts lower-than-anticipated demand for Ethereum ETFs, estimating inflows of $3.2 to $4 billion in the first year of trading. In comparison, the firm expects Bitcoin ETFs to generate significantly higher assets before the end of the year.
On the other hand, boutique crypto asset firm ASXN offers a more bullish outlook, predicting average monthly inflows of $800 million to $1.2 billion into ETH ETFs. ASXN also believes that the impact of ETHE outflows may be less dramatic than feared, thanks to a tightening discount premium to NAV and the launch of Grayscale’s mini ETH ETF.
Overall, the launch of spot Ether ETFs is expected to have a significant impact on the price of Ether in the coming days, with investors closely monitoring the inflows and outflows from these new products. The market remains divided on the potential success of Ether ETFs, but one thing is certain – the crypto world is in for an exciting ride.