Bernstein stated that the recently approved Ethereum ETF is expected to have much lower demand from investors compared to the Bitcoin ETF. In fact, the management company released a research report on Monday predicting a significant decrease in demand for the second cryptocurrency-based exchange-traded product.
The Ethereum ETF has not yet been launched, and the market is eagerly awaiting its arrival. However, experts have indicated that the lack of betting functionality in ETH options means reduced spot conversion. Additionally, when the product does go live, market conditions may further dampen interest in the product.
Source: Wealth Management
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Demand for Ethereum ETF Significantly Lower Than BTC
The approval of the Bitcoin spot ETF in January changed the game for cryptocurrencies. Just three months later, it was a major catalyst for the leading cryptocurrency’s surge to a historic high of $73,000. However, analysts expect the situation for the second digital asset to gain investment products to be different.
Bernstein analysts stated that the upcoming Ethereum ETF is not expected to see the same demand as Bitcoin upon launch. The company’s Gautam Chhugani and Mahika Sapra wrote, “Due to the lack of ETH staking in the ETF, there should not be as much spot ETH conversion.”
Source: Bitcoinist
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While the product has been approved, there is no timetable for it to start trading. The U.S. Securities and Exchange Commission (SEC) approved a key regulatory filing last month, leading to speculation that it could launch in July.
Bernstein added, “ETH, as a major tokenization platform, is establishing a strong use case for stablecoin payments and the tokenization of traditional assets and funds.” They also noted that “improved regulatory infrastructure” will be beneficial for ETH. However, this shift is unlikely to materialize before the upcoming U.S. presidential election in November.