K33 Research Forecasts Higher Inflows for Spot Ether ETFs Compared to Bitcoin

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On July 1, crypto analytics firm K33 Research released a report indicating that the potential live trading of spot Ether exchange-traded funds (ETFs) could attract inflows of nearly $4 billion within the first five months. This surge in investment is expected to outperform the inflows of spot Bitcoin ETFs, highlighting a growing investor interest in Ethereum.

ETH Projected to Break Resistance as Spot Ether ETF Attracts Investors

According to K33 research analysts Vetle Lunde and David Zimmerman, the bullish prediction for spot Ether ETFs is grounded in a detailed comparison of assets under management (AUM) in existing ETH-based exchange-traded products to similar Bitcoin (BTC) products.

Additionally, the analysts consider the amount of open interest (OI) in futures contracts on the Chicago Mercantile Exchange (CME), a key marketplace for institutional investors.

Ether’s OI on CME currently stands at 23% of the size of BTC futures. However, since ETH futures began trading on CME in 2021, the average share of ETH futures has been 35% of BTC futures.

This indicates substantial and consistent institutional demand for ETH in the U.S., a key factor in the bullish outlook for spot ETH ETFs. Institutional interest often signals confidence in the asset’s long-term potential and stability, making it a critical component of K33’s analysis.

Applying these ratios to the nearly $14 billion inflows into spot BTC ETFs, K33 estimates that ETH ETF inflows could range between $3 billion and $4.8 billion within the first five months of their launch.

K33 Research
The average share of ETH futures has been 35% of BTC futures

Based on current ETH prices, this would result in the accumulation of approximately 800,000 to 1.26 million ETH in the ETFs, representing about 0.7% to 1.05% of the total supply.

K33 and JPMorgan Clash Over Spot Ether ETF Outlook

Conversely, research by JPMorgan disclosed on May 30 that Spot Ether ETFs are likely to see much lower demand than Bitcoin ETFs. This was after the SEC’s approval of spot Ethereum ETF applications.

The bank stated that one key factor contributing to the lower demand for ETH ETFs is Bitcoin’s first-mover advantage. Bitcoin’s early entry into the market has allowed it to capture a substantial share of overall demand for crypto assets, especially in response to spot ETF approvals. This established presence means that Bitcoin has already saturated a significant portion of investor interest and market activity in the crypto space.

Despite this, the bank expects spot Ether ETFs to attract high net inflows, potentially reaching up to $3 billion for the remainder of this year. If staking is permitted, this figure could rise as high as $6 billion.

However, K33 research presents a contrasting view to JPMorgan’s stance regarding the impact of staking on inflows to spot Ether ETFs.

According to K33, the omission of staking is unlikely to negatively affect the inflows of these ETFs. This perspective is supported by the data showing that 99% of assets under management (AUM) in Canadian ETH ETFs and 98% in European ETH products are held in funds that do not offer staking.

K33’s analysis suggests that the majority of investors are already comfortable with non-staking ETH ETFs, indicating strong market confidence and interest in these products without the need for additional staking incentives.

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Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.