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The price of Ether (ETH) is anticipated to be sensitive to inflows from new spot ETFs in the coming days, according to crypto analytics firm Kaiko. The launch of spot Ethereum ETFs, which began trading on July 23, is being closely watched, especially given the tepid response to Ethereum futures ETFs in late 2023. Kaiko's Will Cai highlighted that while it might take months to gauge full demand, initial ETF inflows could significantly impact ETH’s price.
One immediate effect could be potential outflows from the Grayscale Ethereum Trust (ETHE), which has previously enforced a six-month lock-up period on its shares. With the new spot ETFs allowing more flexible trading, investors who previously held ETHE shares might move to cash out, impacting the market.
Despite the excitement, there are mixed expectations about the success of Ethereum ETFs. Wintermute, a crypto market maker, forecasts that Ethereum ETFs will attract between $3.2 billion and $4 billion in their first year, which is about 10% to 12% of the inflows seen by spot Bitcoin ETFs. They predict that ETH's price will rise by no more than 24% by the end of 2024.
On the other hand, boutique crypto asset firm ASXN is more optimistic, predicting average monthly inflows of $800 million to $1.2 billion into ETH ETFs. They also believe that outflows from ETHE will be less impactful than feared, partly due to a tightening discount to net asset value and the introduction of Grayscale’s mini ETH ETF, which could help mitigate outflow pressure.
