According to CoinDesk , JPMorgan said in a research report on Thursday (30th) that demand for Ethereum spot ETFs will be much lower than similar Bitcoin fund products for a variety of reasons.
JPMorgan analysts led by Nikolaos Panigirtzoglou wrote:
“Bitcoin has a first-mover advantage that could saturate the overall demand for crypto assets generated by spot ETF approval.”
The U.S. Securities and Exchange Commission (SEC) approved the 19b-4 proposal related to Ethereum spot ETFs last week, but investors must still wait for the S-1 registration statement submitted by the fund issuer to be approved before they can start trading such fund products. "The Block" reported on Thursday, citing two people familiar with the matter, that the SEC has required issuers of Ethereum spot ETFs to submit their S-1 draft documents by Friday, and Bloomberg analysts expect a listing by the end of June to be a reasonable possibility.
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ToggleNot incorporating a staking mechanism will reduce the attractiveness of Ethereum spot ETFs
JPMorgan also expects Ethereum spot ETFs to attract as much as $3 billion in net inflows over the rest of the year, but the investment bank said the figure could rise to $6 billion if such products are allowed to be pledged.
The report pointed out that the Bitcoin halving in April this year was an additional demand catalyst for Bitcoin spot ETFs, while Ethereum will not have a similar impetus in the future. The investment bank said the lack of a staking mechanism for approved Ethereum spot ETFs would also make such products less attractive compared to other platforms that offer staking returns.
Ethereum, as an application token, "has a different value proposition to investors than Bitcoin, which has broader appeal by competing with gold in portfolio allocations," the authors wrote.
JPMorgan also noted that lower liquidity and lower assets under management (AUM) will make the Ethereum spot ETF less attractive to institutional investors than its larger rivals.
Grayscale Ethereum Trust may see $1 billion in outflows
The initial market reaction to the launch of an Ethereum spot ETF may be negative, as speculative investors who bought Grayscale Ethereum Trust (ETHE) in anticipation of its conversion to an ETF may take profits. The report claims that ETHE may experience $1 billion in outflows, putting downward pressure on the price of ether.
According to previous reports by Zombit, cryptocurrency data provider Kaiko said that if Grayscale’s ETHE follows a similar pattern to its Bitcoin Trust Fund (GBTC) in the first month after the conversion, it may experience an average daily outflow of US$110 million.
Related reports: " Market Experts: The cancellation of the pledge plan by Ethereum spot ETF issuers may reduce the attractiveness of such funds "
