Bitwise Asset Management’s Chief Investment Officer (CIO), Matt Hougan, envisions that spot Ethereum (ETH) exchange-traded funds (ETFs), upon approval by the U.S. Securities and Exchange Commission (SEC), will attract billions of dollars in investments within a few months.
In a recent investor memo, Hougan anticipates a minimum of $15 billion in net inflows to ETH ETFs during the initial 18 months.
“The question on everyone’s mind is how much net capital spot ether exchange-traded products (ETPs) will draw. My projection stands at $15 billion within their first year and a half.”
Hougan’s forecast is based on Ethereum’s market capitalization relative to Bitcoin’s, historical performance of similar products in markets such as the UK and Canada, and the influence of the carry trade strategy.
The carry trade strategy involves market participants purchasing spot Bitcoin (BTC) ETFs/ETPs and subsequently selling Bitcoin futures contracts to capitalize on price differentials.
Moreover, the Bitwise CIO highlights, “However, my estimation doesn’t encompass the numerous tailwinds propelling Ethereum’s expansion, including the ascent of stablecoins, increasing regulatory clarity, and the effects of Ethereum’s recent Dencun upgrade, which significantly reduced transaction costs. A robust bullish market for ETH as an asset could substantially boost demand.”
“Nonetheless, I view $15 billion over the next 18 months as a solid initial projection. My intuition suggests we may exceed that figure; ETH remains a compelling asset underpinning the world’s most versatile blockchain. Yet even $15 billion in fresh net demand will profoundly impact the Ethereum market.”
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Image: Midjourney
