K33 Research predicts that the Ethereum ETFs will attract a very strong level of investment on launch.
K33 Research expects inflows between $3.1 billion to $4.8 billion within 5 months, while Balchunas sees $1.4 billion to $2.8 billion.
K33 Research bases its prediction on the success of the Bitcoin ETFs, which have seen about $14.8 billion in inflows so far.
Despite different predictions, both K33 Research and Balchunas expect a massive bullish response from Ethereum regardless.
The Ethereum ETFs were approved U.S. in late May.
However, the full effects of these new financial vehicles have not yet hit the market, because none of the eight approved applications have received the full go-ahead to resume trading.
However, K33 Research believes they are set to be massive on launch.
In this article, we'll go over what K33 Research believes will happen when the ETFs go live, as well as what it might mean for Ethereum and the crypto market at large.
Data from Farside shows that the spot Bitcoin ETFs are performing very well.
The Bitcoin ETF market’s performance
This week, the spot Bitcoin ETFs saw their second-best combined net inflow day of $886.6 million on 4 June.
Fidelity’s FBTC fund saw the largest inflow at $378.7 million, while BlackRock’s IBIT came second with $274.4 million, followed by Ark 21 Shares.
So far, this represents the highest net inflows to the funds since March 12, a day before Bitcoin hit its $73,800 all-time high when the ETFs raked in $1.04 billion.
While this has been good news so far for the Bitcoin ETFs, K33 Research seems to believe that something similar might be incoming for the Ethereum ETFs.
As the basis of its outlook, K33’s prediction picks out the relative global assets under management (AUM) market share between Ethereum and Bitcoin.
In essence, considering how at the time of writing, Ethereum's market share stands at around 28% compared to Bitcoin, the Ethereum ETFs are set to rake in a staggering $4 billion worth of inflows in less than 6 months after the official launch.
According to Farside data, the spot Bitcoin ETFs in the US have taken in around $14.8 billion so far, with the Bitcoin ETFs now controlling over 1 million Bitcoin worldwide.
This means that the ETF market holds around 5% of the flagship cryptocurrency's total supply.
K33 Research draws this parallel to Ethereum, considering how institutional funds currently control 3.3% of Ethereum's circulating supply.
K33 Research believes that this means the Ethereum ETFs will take in between $3.1 billion and $4.8 billion after launch, which is about 750,000 to 1 million ETH, or 0.65% to 0.85% of the cryptocurrency’s current circulating supply.
Ethereum’s estimated five-month inflows
Moreover, the ETH CME futures, also currently sits at around 22.9% of Bitcoin’s size. Interestingly enough, between September 29 and December 26, the Ethereum Futures market captured around 34.6% of the inflows captured by the Bitcoin futures ETFs.
Bloomberg ETF analyst, Eric Balchunas has also weighed in on the topic.
However, while K33 Research has $4 billion hopes for the Ethereum ETFs, Balchunas isn’t so sure.
The analyst stated in a recent tweet, that he expects the new Ethereum ETFs to take in about 10% and 20% of the inflows of the spot Bitcoin ETFs—which would also be a win because while K33 Research puts the Ethereum inflows between $3 billion to $4 billion, Balchunas' estimate puts it at around $1.4 billion - $2.8 billion.
Overall, regardless of how things turn out, analysts seem to agree that the Ethereum ETF trading launch is a highly bullish event, and that we are set to see billions of dollars worth of inflows into Ethereum.
Who knows, we might even be seeing a $5,000 Ethereum sooner than later.
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