In an eagerly awaited move, the introduction of Ethereum-based exchange-traded funds (ETFs) in the United States is expected to attract substantial inflows and potentially boost ETH prices. According to K33 Research, these ETFs are expected to receive between $3 billion and $4.8 billion during their first five months, accumulating between 800,000 and 1.26 million ETH. That represents a 0.7% to 1.05% share of the total token supply, which could create a supply crunch and increase prices.
K33 Research’s forecast is based on the performance of existing ETH-based exchange-traded products worldwide and the open interest (OI) in ETH futures contracts on the Chicago Mercantile Exchange (CME). While Ether’s OI on CME stands at 23% of Bitcoin’s futures size, it has averaged 35% since ETH futures began trading in 2021, indicating robust institutional demand for ETH in the U.S.
By applying these ratios to the nearly $14 billion inflows into spot Bitcoin ETFs, K33 estimates ETH ETF inflows could reach $3 billion to $4.8 billion within five months. This projection slightly surpasses JPMorgan’s $3 billion forecast for the same period. At current prices, this influx would accumulate between 800,000 and 1.26 million ETH in the ETFs, significantly impacting the market.
Experts’ Predictions: Ethereum to Reach $5,000
Similar to Bitcoin’s experience, this substantial supply absorption will likely lead to an increase in ETH prices, stated Vetle Lunde, senior analyst at K33 Research. Following the launch of U.S. spot Bitcoin ETFs, Bitcoin surged nearly 60% to record highs. K33 analysts predict that Ethereum could experience a similar trend, potentially outperforming Bitcoin after an extended downtrend in the ETH-BTC pair.
Market sentiment remains optimistic, with some experts projecting Ethereum to reach new highs.” David Brickell of FRNT Financial expects the cryptocurrency to hit $5,000 by the close of June due to positive economic outlooks and crypto-friendly legislative developments. Moreover, Jacob Joseph from CCData expects during the first 100 days $3.9 billion in inflows to U.S. spot Ethereum ETFs.
As the market braces for the launch of these ETFs, the consensus among analysts is clear. The introduction of spot ETH ETFs will significantly boost institutional demand, creating a supply crunch expected to drive Ethereum prices higher in the coming months.
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