Bitwise: The Ethereum spot ETF is expected to attract $15 billion in inflows.

Matt Hougan, founder of ETF issuer Bitwise, speculates that the Ethereum spot ETF will attract $15 billion in capital inflows within 18 months of listing.

Bitwise estimation method

Here’s how Bitwise estimates Ethereum spot ETF flows

Rough estimate based on Bitcoin/Ethereum market capitalization

The starting point for estimating flows is the relative market capitalization of BTC and ETH.

• BTC: $1,266 billion (74%)
• ETH: $432 billion (26%)

U.S. investors invested $56 billion in Bitcoin spot ETFs. Hougan estimates that by the end of 2025, as these commodities gradually mature and are approved on platforms such as Morgan Stanley, this number will reach 100 billion U.S. dollars, and at this ratio, the asset management scale of Ethereum spot ETF will reach 350 One hundred million U.S. dollars.

Assets minus ETHE

But Grayscale’s Ethereum Trust ETHE will convert $10 billion in assets directly into ETFs, and the net inflow after deductions should be $25 billion.

Comparing this to European and Canadian figures, Bitcoin and Ethereum’s shares appear to be not too far apart.

However, Hougan still chose to use a conservative estimate of 22% of the market share in Europe and lowered the net inflow from US$25 billion to US$18 billion.

Assets net of carry trades

There's another major factor to consider: arbitrage trading. The U.S. Bitcoin spot ETF may have up to $10 billion in assets related to arbitrage trading, with institutional investors buying the ETF and selling BTC futures contracts on CME.

( Bitcoin ETF has continued net inflows but has not risen? CME short arbitrage has reached a new high, and they are not here to buy coins )

However, considering that the ether held by the Ethereum spot ETF cannot be pledged, Hougan predicts that such arbitrage transactions will not occur in the Ethereum spot ETF, so he revised down the US$18 billion to US$15 billion.

$15 billion is still a huge success story

Hougan believes this will be a historic success story. Because since January 2020, only four ETFs have received $15 billion in inflows. However, he does not believe that the inflow of funds is linear. Instead, there may be a net outflow due to the redemption of ETHE when it was first launched. But Hougan considers ETH to be one of the best-performing assets of all time and believes its best days are ahead.

Bitfinex's previous analysis, using the examples of gold and silver ETFs, estimated that Ethereum spot ETFs have the opportunity to capture 10-20% of the funds currently flowing into Bitcoin ETFs. Bloomberg ETF analyst Eric Balchunas estimated the performance of the Ethereum spot ETF, and about 10% of the Bitcoin spot ETF's performance is already quite good.

( Ethereum is digital silver, and the Ethereum spot ETF will attract 10% of Bitcoin ETF funds )