Trading house Wintermute expects inflows to be lower than consensus forecasts, while research firm Kaiko said the data showed "little confidence" in the release.
- Wintermute and Kaiko predict that initial demand for a spot Ethereum ETF may be lower than expected.
- Wintermute expects inflows into bitcoin ETFs to be about 62% lower over the next year than they were in six months.
Wintermute, a large market maker, expects Ethereum ETFs to receive up to $4 billion in inflows from investors over the next year. That's lower than the $4.5 billion to $6.5 billion most analysts were expecting, and about 62% less than the $17 billion that Bitcoin ETFs have raised so far since they began trading in the U.S. six months ago. However, Wintermute does expect the price of Ether to rise 24% over the next 12 months, driven by those inflows.
Eight potential issuers filed final documents last week and are set to list their products in the U.S. as early as Tuesday, including BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Bitwise, 21Shares and Invesco.
U.S. regulators have rejected a request from issuers to allow Ethereum ETFs to collateralize their cryptocurrency holdings, which would have generated income that could be shared with investors.
“This loss reduces the competitiveness of ETH ETFs compared to outright holding, as investors can still benefit from staking,” Wintermute said in its report.
Research firm Kaiko has a similar take based on previous Ethereum-focused releases.
Will Cai, head of indexes at Kaiko, said in a report: “At the end of last year, the futures-based ETH ETF was launched in the United States, but the demand was not ideal. All eyes are on the ETF launch scene, with high hopes for rapid asset accumulation.
He said that regardless of the long-term trend, ether’s price is likely to be “sensitive” to the amount of inflows in the first few days of trading.
According to data tracked by Kaiko, ether’s implied volatility surged over the weekend, with the contract closest to expiration (July 26) jumping from 59% to 67%.
“This suggests a lack of confidence in ETH’s launch as traders are willing to pay higher premiums to hedge their bets,” the report said. Issuers disclosed the expected management fees in a filing last week, clearing one of the final hurdles to obtaining final regulatory approval, with Grayscale’s Ethereum Trust seeking to charge investors 2.5%, while most other managers keep fees in the lower range of 0.15% to 0.25%.
