Andrew Kang, founder and partner of cryptocurrency venture capital firm Mechanism Capital, believes that the impact of the Ethereum spot ETF on the price of Ethereum will not be as significant as that brought by the Bitcoin spot ETF. He predicts that before the launch of the Ethereum ETF, Ethereum will (ETH) will trade between $3,000 and $3,800, and after the ETF launch, Ethereum may fall to between $2,400 and $3,000.
Kang said in an article published on Sunday (23rd) that unlike Bitcoin (BTC), Ethereum has attracted less institutional interest, there is little incentive to convert Ethereum spot into ETF form, and online cash flow is also limited. Not ideal. He wrote:
"How much upside can the ETH ETF bring? I don't think it will be much unless Ethereum develops a strong way to improve its economics."
Andrew Kang believes that the Ethereum spot ETF attracts 15% of the flow seen by the Bitcoin spot ETF, which is not far from the 10% to 20% estimated by Bloomberg ETF analysts Eric Balchunas and James Seyffart.
Kang pointed out that the Bitcoin spot ETF saw only $5 billion in new funds (not including funds converted from spot forms) inflows in the first six months after its launch. Applying this data to Ethereum, the Ethereum spot ETF estimates that there could be $840 million in "real" inflows during the same time frame.
Furthermore, Kang predicts that the price of ETH against BTC will continue to decline, with the ratio to be in the range of 0.035 to 0.06 in the coming year. He wrote:
“Although our sample size is small, we do see ETH/BTC making lower highs every cycle, so this should come as no surprise.”
According to TradingView data, the price of ETH against BTC has continued to fall since September 2022, and hit a three-year low in May this year. The price of ETH/BTC seems to be showing signs of forming a bottom recently, and it remains to be seen whether it can break the downward trend.
