Investors are eagerly awaiting the launch of Ethereum spot ETF this month. However, reports of delays seem to have made investors uneasy.
But according to a recent report released by cryptocurrency exchange Gemini, once the Ethereum spot ETF is launched, these new products are expected to attract a net inflow of $3-5 billion within the first six months of trading.
Massive inflow for Ethereum ETF
Gemini’s analysis suggests that the introduction of Ethereum spot ETF in the United States could significantly increase the total assets under management (AUM). When the projected new inflow is combined with the existing assets of the Grayscale Ethereum Trust (ETHE), the total AUM of the US Ethereum spot ETF could reach $13-15 billion in the first half of trading.
The report also points out that Ethereum’s market value is currently close to its lowest levels in recent years compared to Bitcoin. However, the expected capital inflow into these new instruments could improve its market position relative to Bitcoin.
If the ETH/BTC ratio returns to the three-year median of 0.067, it would grow by nearly 20%. In a more optimistic scenario, reaching the maximum ratio of 0.087 during this period would translate to a 55% rebound.
Gemini states that considering the fact that spot Bitcoin ETF attracted $15 billion in a similar time period, inflows below $3 billion in the first six months would be “disappointing.” Meanwhile, inflows exceeding $5 billion, equivalent to one-third of Bitcoin ETF inflows, would be considered a strong performance. Reaching nearly 50% of Bitcoin ETF inflows, or around $7.5 billion, would be a “significant upside surprise.”
Delay in the launch of Ethereum spot ETF
Currently, eight fund issuers have received approval for the Ethereum spot ETF’s 19b-4, awaiting final S-1 authorization to list and start trading the product. Previous market predictions indicated a 73% chance of these ETFs being launched before July 4th. However, recent developments have significantly reduced this likelihood.
It is reported that the U.S. Securities and Exchange Commission (SEC) has requested additional modifications to the applications, leading to a delay. Despite this setback, the final approval of the Ethereum spot ETF is still expected. The deadline has been extended, requiring fund issuers to submit the latest applications by July 8th.