News from CoinDesk:
Author: Matthew Hougan, Bitwise Asset Management; Translation: Baishui
In last week’s CIO Memo, I projected that Ethereum ETPs would see $15 billion in net flows by the end of 2025. This would mark a significant achievement, positioning Ethereum ETPs near the top of historically successful ETP launches.
However, it falls short compared to the success of Bitcoin ETPs, which attracted $14 billion in net flows in less than six months post-launch.
I anticipate that by the end of 2025, with approvals on major platforms like Morgan Stanley and Merrill Lynch, this figure could surpass $50 billion.
By market capitalization, Bitcoin is three times the size of Ethereum and enjoys higher recognition, thus it logically attracts three times the flow of Ethereum products.
Yet, something has been troubling me since I penned that CIO Memo.
If circumstances were to change in some way, I believe Ethereum ETPs could vastly exceed my expectations. Here’s why:
The High-Growth “Tech Stocks”
Naive investors (and some media outlets) often conflate Bitcoin and Ethereum because they are the two largest crypto assets. However, readers of this memo know they are as distinct as gold and oil.
Bitcoin is designed as a new currency asset. Its aim is to compete with gold, the US dollar, and other fiat currencies as both a store of value and eventually a medium of exchange.
This is an exciting stage. The “money” market, dominated by gold, exceeds $10 trillion, making it the largest in the world. If Bitcoin successfully penetrates these markets, its value could easily increase tenfold or more.
Ethereum, on the other hand, is entirely different. Structurally, Ethereum is a technical platform: a fully programmable blockchain serving as the foundation for new crypto-based applications such as tokenization, stablecoins, and decentralized finance.
Ethereum’s economics are straightforward: as more people use these applications under identical conditions, the value of Ethereum (the asset powering the Ethereum blockchain) increases.
This is because you need to pay fees in ETH to use the platform.
Leading Blockchain by Use Case
Source: Bitwise Asset Management
Why Ethereum ETPs Might Exceed Expectations
This is where I quietly suspect Ethereum ETPs could surprise on the upside. After all, investors love tech stocks. Nearly all investors have stakes in high-growth tech companies like Nvidia and Meta, while comparatively fewer invest in monetary assets like gold.
It’s easy for me to imagine investors selling off a small portion of their tech holdings to buy ETH. I believe this is easier than imagining investors creating an entirely separate portfolio for a new currency asset.
To make this happen, we need a core idea — that ETH is a tech investment — to gain mainstream attention. To achieve this, you need to see two things: 1) more people understanding the differences between Ethereum and Bitcoin, and 2) some applications built on Ethereum gaining mainstream attention.
What would that look like? Imagine stablecoin assets increasing from $160 billion to $16 trillion as more people adopt blockchain payments for speed and transparency. Or consider decentralized finance opening new avenues for lending with clarified regulatory applications. Or envision more companies following BlackRock’s lead in establishing tokenized funds on the Ethereum platform. Betting on certainty? Certainly not. But you don’t need to stretch to imagine it.
Perhaps someone needs to launch a new ETF with 10% in ETH and 90% in tech stocks.