In a shopper note on Tuesday, Hougan predicted that spot Ethereum ETF inflows may push ether costs to all-time highs above $5,000, although he expects preliminary market volatility.
Hougan anticipates the primary few weeks following the launch of Ethereum ETFs to be “uneven” for ether, as funds could stream out of the $11 billion Grayscale Ethereum Trust (ETHE) upon its conversion to a spot ETF. Despite this anticipated turbulence, he expressed confidence that new highs could be reached by year-end. “If flows are stronger than many market commentators anticipate, the worth could possibly be a lot increased nonetheless,” Hougan added.
On May 23, the Securities and Exchange Commission (SEC) authorized eight 19b-4 varieties for spot Ethereum ETFs from Bitwise, BlackRock, Fidelity, VanEck, Ark Invest, Invesco, Franklin Templeton, and Grayscale. However, these issuers nonetheless want their S-1 registration statements to develop into efficient earlier than buying and selling can start, which sources indicated to The Block may occur by July 23.
ETF Flows Impact on Ether Compared to Bitcoin
Hougan famous that whereas spot ETFs don’t alter the basics of an asset like ether, they introduce new sources of demand. He highlighted the affect of spot Bitcoin ETFs, together with Bitwise’s BITB, which collectively bought 263,965 BTC since their launch, in comparison with the 129,281 BTC produced by bitcoin miners throughout the identical interval—greater than double the output.
Bitcoin has seen a roughly 40% worth enhance for the reason that ETFs launched on January 11, and greater than 100% for the reason that market started pricing of their approval in October 2023. Hougan expects the affect on ether to be even higher, emphasizing the potential for substantial market motion.
Previously, Hougan projected that spot Ethereum ETFs would entice $15 billion in internet inflows inside their first 18 months. This projection suggests a slower tempo in comparison with Bitcoin ETFs, which achieved the identical internet influx milestone in simply 5 months of buying and selling.
