Analyst: Ethereum ETF to Drive ETH to All-time High
11 Jul, 2024 ● Crypto people
Tom Dunleavy, a managing partner at crypto investment firm MV Global, told Cointelegraph that Ether exchange-traded funds (ETFs) are expected to attract up to $10 billion in new inflows in the months following their launch, propelling Ether prices to all-time highs by the end of the year.
“We saw $15 billion in flows for Bitcoin. I think we’re probably going to see $5 billion to $10 billion for Ethereum,” Dunleavy said. “I expect a very positive price impact sending us to new all-time highs by early Q4.”
Eight spot Ether ETFs are currently awaiting final approval from United States regulators and are anticipated to start trading soon, potentially as early as this month.
These funds will join an existing lineup of approximately a dozen Bitcoin ETFs, which began trading in January and collectively manage about $15.9 billion.
Dunleavy expects ETH ETFs to attract around $1 billion per month as a “base case” over the next few months.
He explained that, compared to BTC, ETH is “less available on exchanges, mean[ing] thinner order books and less to purchase,” making ETH’s spot price more responsive to ETF buying demand than BTC’s.
“The BTC ETF led to a price appreciation of 36% from the January 10th launch date to the peak and >50% from the time of initial speculation and rumors,” Dunleavy wrote in a Q2 investor memo shared with Cointelegraph.
“We believe that there will be strong buy pressure with a much clearer narrative that traditional investors can understand. ETH has cashflows. It can be described as a tech stock, the app store of crypto, or an internet bond [...] This is a much easier sell for financial advisors than ‘digital gold,’” according to the memo.
This year, ETH’s performance has lagged behind BTC’s, experiencing relatively deeper drops during downturns, according to TradingView data.
Dunleavy warned that a rebound in ETH’s performance may not necessarily extend to altcoins, partly due to the lack of overlap between crypto’s institutional and retail markets.
Ether ETF investors “are not going to be users who were onchain. They’re going to be users who were holding the stuff in their 401k,” Dunleavy said.
Sources:
https://cointelegraph.com/news/ethereum-etf-inflows-10-billion-eth-new-highs-analyst
