Crypto fanatics eager for a market-shattering Ethereum spot ETF launch may be in for an underwhelming surprise, according to Bloomberg ETF analyst Eric Balchunas.
While the recent launch of multiple Bitcoin spot ETFs in the United States has proven phenomenally successful, Balchunas claims a follow-up launch for Ethereum would be “small potatoes” compared to the original.
Do Ethereum ETFs Matter?
In a post to X on Saturday, Balchunas wrote:
“No offense to the ETH people but this is such small potatoes vs spot bitcoin ETFs. It’s like the opening act coming on after the headliner. Using GenX bands, it’s like Sister Hazel trying to follow Nirvana.”
Balchunas explained that his prediction is based on both anecdotal and public data suggesting that the Ethereum ETFs will be “nothing close” to their Bitcoin-based equivalents, which have hauled over $7 billion in net flows since launching on January 11.
Before launching, asset managers fought a lengthy legal war with the Securities and Exchange Commission (SEC) to get Bitcoin spot ETFs approved for public securities exchanges, due to major disagreements about whether the Bitcoin market was prone to external manipulation.
After Grayscale prevailed over the agency in court last year, the firm quickly applied to launch an Ethereum spot ETF, later followed by BlackRock and Fidelity – the three largest providers of Bitcoin spot ETFs today.
Ethereum VS Bitcoin ETFs: What We Know
Though many are confident the SEC will again be forced to approve the product, whether or not the market wants to buy it remains questionable. For instance, Ethereum futures ETFs launched in October last year, but generated tiny flows and volume compared to Bitcoin’s first futures ETF in October 2021.
Looking to Canada’s spot ETFs, the Purpose Ether ETF currently boasts an AUM of $458 million CAD, versus the $2.5 billion AUM with the company’s Bitcoin ETF. For context, Ether’s global market cap is roughly one-third the size of Bitcoin’s, meaning it may be relatively less popular within an ETF wrapper than BTC.
Per a Bitwise survey of registered investment advisors conducted last year, 71% of advisors said they favored Bitcoin over Ethereum.
In comments shared with CryptoPotato in November, the asset manager explained that ETFs would be more meaningful for Bitcoin than for Ethereum, due to institutional investors’ general ignorance about the difference between the two assets.
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