Spot ETH ETF Products Launch Today After SEC Approval But May Face Underwhelming Demand

Demand
for
spot
ETH
ETF
(exchange-traded
fund)
investment
vehicles
might
underwhelm
after
they
received
final
approval
from
the
US
Securities
and
Exchange
Commission
(SEC)
to
start
trading
today.

Prominent
market
maker
Wintermute
forecasts
that
Ethereum-based
investment
products
will
collect
$4
billion
at
most
from
investors
over
the
next
year.
That
is
far
less
than
the
$17
billion
that
spot
Bitcoin
ETFs
have
already
raked
in
since
their
debut
at
the
start
of
the
year. 

Research
frim
Kaiko
echoes
that
sentiment,
basing
its
prediction
on
the
underwhelming
demand
for
futures-based
ETH
ETFs
when
they
launched
in
the
US
last
year.

ETH
ETF
Launches
Could
Spur
A
24%
Gain
In
The
Ethereum
Price
In
12
Months

Spot
ETH
ETF
issuers
received
on
July
22
the
final
approval
needed
from
the
SEC
for
their
respective
products
to
start
trading
today.
Fidelity,
VanEck,
BlackRock,
Grayscale,
Franklin
Templeton,
Bitwise,
21Shares
and
Invesco
all
plan
to
launch
spot
ETH
ETFs
today. 

Despite
Wintermute’s
prediction
that
the
debut
of


ETH

ETFs
will
be
met
with
low
demand,
the
market
maker 
said
inflows
into
the
products
could
lead
to
ETH’s
price
gaining
as
much
as
24%
over
the
course
of
the
next
12
months.

Investors
Might
Prefer
Holding
ETH
Directly 

Investors
might
also
opt
to
hold
ETH
directly
over
investing
in
Ethereum
ETFs
since
the
investment
products
will
not
be
allowed
to
stake
their
holdings.

This
could
have
led
to
extra
income
for
investors.
Regulators
denying
issuers’
requests
to
allow
staking
has
subsequently
reduced
“the
competitiveness
of
ETH
ETFs
compared
to
direct
holdings,”
said
Wintermute.

Our
latest
Data
Debrief
is
out
now.

We
looked
at

$ETH
expectations
ahead
of
the
launch
of
spot
ETFs
in
the
US.
Check
it
out
for
insight
on
how
the
market
is
positioned
and
where
it
might
go.https://t.co/Cl4oPNFeRG

—
Kaiko
(@KaikoData)

July
22,
2024

If
last
year’s
launch
of
futures
based
ETH
ETFs
in
the
US
is
any
indication,
then
Kaiko
believes
spot
ETH
ETFs
might
take
some
time
to
gain
traction
in
the
market.

Kaiko’s
head
of
research,
Will
Cai,
said
in
a
July
22


report

that
a
“full
demand
picture
may
not
emerge
for
several
months.”
Cai
added
that
the
“ETH
price
could
be
sensitive
to
inflow
numbers
of
the
first
days.”

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