On July 23, Spot Ethereum ETFs had a strong debut, bringing in $107 million. This success has made Matt Hougan, Chief Investment Officer at Bitwise Asset Management, optimistic about the future of crypto ETFs.
Hougan noted the positive reception of the new Ethereum ETFs and believes this success paves the way for more crypto ETFs, including potential ones for Solana (SOL).
Ether ETF Success Boosts Optimism for Future Crypto ETFs
Matt Hougan, Chief Investment Officer at Bitwise Asset Management, was impressed by the debut performance of Ethereum ETFs, including Bitwise’s own ETH ETF (ETHW). The ETHW alone saw over $200 million in inflows on its first day, surpassing Hougan’s expectations. He highlighted that the new Ethereum ETFs saw around $500 million in trading volume, a significant amount compared to the average ETF’s launch day trading of about $1 million.
Hougan views the success of the Ether ETFs as a landmark moment for the crypto market, suggesting it marks the beginning of a new era for crypto investments. He predicts that by 2025, the ETF landscape will expand to include multiple crypto assets and index-based ETFs.
The success of the Ethereum ETFs also raises the likelihood of other crypto assets, such as Solana, entering the ETF market. VanEck and 21Shares have already filed for Solana ETFs, which could further diversify the ETF offerings in the crypto space. The robust performance of Spot Ethereum ETFs on their launch day has reinforced positive sentiments among experts about the future of crypto ETFs.
Ethereum ETF Launches Make Waves with Record Inflows and Mixed Reactions
On the first day of launch, BlackRock’s ETH ETF (ETHA) led the market with $265 million in total inflows, positioning itself as the top performer among its competitors. Fidelity’s Ether ETF (FETH) followed with over $70 million in inflows, while other participants such as Invesco, 21Shares, VanEck, and Franklin recorded inflows ranging from $5 million to $15 million.
In contrast, Grayscale’s ETHE fund experienced significant outflows totaling $484 million, representing about 5% of its $10 billion in assets under management. This outflow occurred shortly after Grayscale transferred $1 billion to its Ethereum Mini-Trust for the launch event.
Bloomberg analyst Eric Balchunas highlighted the remarkable success of these launches, noting that ETHA achieved the highest day-one volume among new ETFs in the past year, excluding Bitcoin ETFs. He also pointed out that ETHW ranked fifth, FETH second, and other Ether ETFs performed well.
Matthew Sigel, Head of Digital Assets Research at VanEck, praised the strong performance of Ethereum ETFs, stating, “23% of Day 1 Spot Bitcoin ETF Volumes is a Great Result for #ETH ETFs, which collectively traded $1.1 billion.”
Crypto ETFs: Institutional Role & Altcoin Forecast
Looking ahead, Matt Hougan, Chief Investment Officer at Bitwise, anticipates a significant increase in institutional involvement in Bitcoin and Ethereum ETFs. Currently, institutional investors contribute 5-6% of Bitcoin ETF inflows, according to recent 13F filings. Hougan expects this figure to rise to 50% as more institutions become involved.
Spencer Bogart, General Partner at Blockchain Capital, has forecasted that Ethereum ETFs could attract over $10 billion in inflows within their first year. Ryan Rasmussen, Head of Research at Bitwise, projected that the price of Ethereum could reach a new all-time high between $6,500 and $7,500.
The approval of Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) has ignited speculation about the future of ETFs for other cryptocurrencies. Geoffrey Kendrick, an analyst at Standard Chartered Bank, previously suggested that the SEC might approve ETFs for Solana (SOL) and Ripple-backed XRP by 2025. However, Kendrick believes these approvals are unlikely in 2024 due to the intricate regulatory process.
Additionally, Kendrick noted that the SEC’s decision not to classify Ethereum as a security could set a precedent for other cryptocurrencies with similar technology. This may open the door for additional ETF launches in the future, as other altcoins could follow Ethereum’s lead.
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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