Spot Ether ETF Launch: Bitwise CIO Predicts Rough Start but Significant Impact on Price

Title: Spot Ether ETFs Expected to Have a Bigger Impact on Price Than Bitcoin ETFs, Says Bitwise CIO

The launch of United States spot Ether exchange-traded funds is anticipated to have a significant impact on the price of Ether, according to Bitwise Chief Investment Officer Matt Hougan. While the initial weeks may be choppy as money flows out of the Grayscale Ethereum Trust, Hougan is confident that by year-end, new highs will be reached.

Hougan outlined three main reasons why he believes Ether ETFs will have a bigger impact on the asset’s price. Firstly, Ether’s inflation rate effectively amounts to zero due to the widespread usage of Ethereum-based applications. Additionally, unlike Bitcoin miners who are forced to sell Bitcoin to cover operational costs, those staking ETH do not have significant direct costs. Lastly, approximately one-third of all ETH is staked and locked away, effectively taking it off the market.

The spot Ether ETF is expected to debut on July 23, with Bloomberg ETF analyst Eric Balchunas confirming the launch date. Hougan predicts that the ETF will push Ether’s price above $5,000 by the end of 2024, representing a 47% increase from its current price.

While Hougan’s prediction is optimistic, pseudonymous crypto trader Daan Crypto Trades believes that the potential inflows into Ether ETFs have been underestimated, suggesting that the price could go even higher. However, not all traders share this sentiment, with pseudonymous trader Kaleo predicting a dip in Ether’s price upon the ETF launch.

Despite differing opinions, the anticipation for the spot Ether ETF launch is high, with futures traders betting on both a decline and an increase in Ether’s price. As the market awaits the launch, investors are advised to conduct their own research and exercise caution when making investment decisions.