- US ETH ETF could attract fewer capital flows compared to US BTC ETF products
- The analyst based his projection on ETH versus BTC futures ETFs and silver versus gold.
The long-awaited launch of the American spot Ethereum [ETH] ETFs (exchange traded funds) may struggle to match the ETF’s success Bitcoin [BTC] ETF. According to Bloomberg ETF analyst Eric Balchunas, the much-hyped spot ETH ETFs could capture around “20%” of the BTC ETF’s market share.
Part of Balchunas’ analysis read,
“I would at least divide by 5 when it comes to expectations around the reflows/volume/media/all of the Ether spot ETFs versus the spot Bitcoin ETFs. That said, grabbing 20% of what they got would be a huge win/successful launch by normal ETF standards.”
Ethereum ETF vs Silver ETF
The analyst’s 20% share of the BTC ETF market share was based on the current futures market share. ETH ETF instruments are already available as futures ETF offerings in several jurisdictions.
Based on the futures market share between BTC and ETH, Balchunas showed that ETH only held about 20% on average, a likely scenario that could also spot ETFs.
“The poor representation of the ethical future is a big part of my analysis. That said, the stronger results in Europe have caused me to split the final forecast of a 20% share.”
Source: X/Balchunas
Furthermore, the analyst equated BTC to gold and Ethereum to silver and made a different analysis and assumption of the ETF basis between gold and silver. According to Balchunas, Silver ETF currently has only 15% of the market share of Gold ETFs. He declared,
“Many will not feel the need to move beyond bitcoin/gold for their crypto/precious metals allocation.”
As of May 28, US spot BTC ETFs had $13.7 billion in cash total flows. Based on Balchuna’s projection, that could amount to $2.7 billion in ETH ETFs over the same period.
However, from a Hong Kong perspective, BTC flows, especially based on Bosera’s leading ETF funds, were twice as large as ETH flows for the spot products.
According to Farside factsHong Kong’s Bosera spot BTC ETF saw total inflows of $15.3 million, compared to $7.5 million for its ETF product. That translates to about 50% of the BTC ETF flows for Bosera spot ETH ETF.
However, according to CoinMarketCap data, ETH’s $454 billion spot market capitalization was 34% of BTC’s $1.3 trillion.
That said, the US spot ETH ETF products could launch in July, with some analysts expecting this ETH price to reach $4.5K before they start trading.