Spot Ethereum ETFs may not meet expectations, according to JPMorgan analysts. In a report titled “Flows and Liquidity,” the team led by Nikolaos Panigirtzoglou expressed their belief that these ETFs may not attract significant interest due to their similarities with existing Bitcoin ETFs.
The report, which spans 25 pages, dedicated less than a single page to Ethereum. JPMorgan analysts highlighted two key reasons why Spot Ethereum ETFs may struggle to compete with Bitcoin ETFs. Firstly, Bitcoin’s advantage of being the first cryptocurrency means that much of the demand has already been met by Bitcoin, even if Spot Ethereum ETFs are approved.
Additionally, the analysts noted that the removal of the staking feature from Ethereum ETFs puts them at a disadvantage compared to platforms that offer staking returns. JPMorgan’s calculations suggest that if the ETF starts trading before the end of the year, it could see net inflows of $1 billion to $3 billion throughout the remainder of 2024.
In a similar vein, data from The Block reveals that spot Bitcoin ETFs had assets under management of $59 billion as of May 30. When spot Bitcoin ETFs began trading on January 10, Grayscale Bitcoin Trust’s assets under management stood at $28.7 billion. Meanwhile, Grayscale Ethereum Trust’s assets under management were at $11 billion as of Thursday.
Analysts caution that Ethereum ETFs may experience similar inflows once they start trading, similar to Grayscale’s Bitcoin product. However, investors should be aware that cryptocurrencies are highly volatile and carry risks, and should conduct their own research before investing.
