Top Trader Flags Key Factors To Watch For The Ethereum ETF Trading Launch

Crypto trader Evanss6 weighed in on the launch of Ethereum ETH/USD ETFs, highlighting their potential impact and comparisons to the Bitcoin BTC/USD ETFs.

What Happened: Evanss6 noted that the low volume of spot Ethereum trading on Coinbase could make any new net spot flows more impactful. He predicted an increase in Coinbase trading volume starting from the day the ETFs launch.

Some thoughts on tomorrow's launch:

We are still in fairly low volume summer with spot ETH trading in the low to mid 9 figures a day range on CB spot. This makes any new net spot flows more impactful. You should see CB volume increase starting tomorrow as a result of the ETFs.… pic.twitter.com/dCcgJ3GQGG

— Evanss6 (@Evan_ss6) July 22, 2024

The trader pointed out two key differences between the launch of Ethereum ETFs and Bitcoin ETFs—seasonality and Grayscale’s Ethereum Trust ETHE trading at less than a 2% discount to net asset value for two months.

But he expressed skepticism about Grayscale’s Ethereum Mini Trust, which holds 10% of the fund’s assets under management (around 300,000 ETH) and charges a fee of just 15 basis points, lower than giants like Fidelity and BlackRock, significantly impacting net flows.

Evanss6 noted that ETHE represents a lower percentage of the ETH in circulation than the Grayscale Bitcoin Trust ETF GBTC did for BTC. He mentioned that there is less toxicity in the holder base and anyone eager to get out has had two months to do so. Moreover, aggressive outflows from GBTC lasted for the first two weeks before the first modest net inflows.

Also Read: Why Are Ethereum Classic And Ethereum Name Service Shooting Up On Spot ETH Approval Day?

Why It Matters: Predictions for the Ethereum ETF differ. Some expect as low as 0-7% compared to Bitcoin ETFs, and others predict substantial new inflows and reallocation flows from Bitcoin ETF buyers. Bloomberg analysts Eric Balchunas and James Seyffart initially expected ~10% relative flows compared to the Bitcoin ETF but have since increased their estimates.

Crypto news provider Wu Blockchain flagged Wintermute's prediction that the spot Ethereum ETF will attract up to $4 billion in capital inflows in the next year, and the price of ETH will rise by 24% in the next 12 months.

What’s Next: The influence of Ethereum as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next:

• Ethereum ETFs Get Final Go-Ahead From The SEC: What Happens Next?

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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