Bitwise anticipates a rally in Ethereum prices with the launch of the U.S.-based spot Ether ETFs next week. The introduction is set to push Ethereum to new levels and possibly even above $5,000. Volatility might be observed initially as funds will be redirected from the $11 billion Grayscale Ethereum Trust, which is converting to the ETF structure.
Ethereum ETF Launch Predicted to Surge Prices
Based on the above arguments, the Bitwise report states that Ethereum has several features that make it superior to Bitcoin and, therefore, more suitable for ETFs. Ethereum’s inflation rate is 0% as of now, while it was different during the launch of the Bitcoin ETF. This conflict produces a situation in which there is a high level of demand but a low level of availability. Also, 28% of Ethereum is staked and cannot be sold, leading to increased pressure on the supply side.
The firm also pointed out that Bitcoin appreciated in value after the launch of the first ETF. The prices of the new Bitcoin went up by approximately 25% in the initial month and reached over 110% in the course of the subsequent year in the market. These history lessons give Ethereum a positive outlook for the future after the ETF is launched.
Ethereum Expected to Hit New Highs Post-ETF
Bitwise has estimated that the Ethereum spot ETFs could gather around $15 billion of net assets within 18 months of launch. This influx will greatly influence the Ethereum market structure in one way or another. Steno Research shares this projection, with the research firm expecting Ether to trade at a minimum of $6,500 by the end of this year. Other market factors are expected to propel this growth in the future.
Matt Hougan, Bitwise’s CIO, is optimistic about these estimates. He expects Ethereum to soar even higher by the end of the year, possibly to even greater heights depending on the volume of inflows into the market. Such a case depicts how powerful ETFs can be in the cryptocurrency market.
The launch of Ether ETFs can be considered a significant event in the Ethereum ecosystem. While traditional investors prepare for these new investment products, the entire cryptocurrency market prepares for possible historical changes.
Also Read: Bitcoin ETF Post $422.5 Million Inflows, Highest Since June
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