Bitwise files revised S-1 for Ethereum ETF — analysts forecast July debut

Bitwise has updated its S-1 registration with the US Securities and Exchange Commission (SEC) to list and trade spot Ether exchange-traded fund (ETF) shares. This suggests that the product is nearly ready for launch. 

Also Read: Ethereum ETF launch preceded by high network activity, low gas fees, and price weakness

Bitwise Chief Investment Officer Matt Hougan projects that Ethereum ETFs could see net inflows of $15 billion within their first few months of its launch.

Ethereum ETF could pave the way for multi-billion dollar inflows

Bitwise filed an early amendment to its Form S-1 registration statement with the SEC on July 3, including a six-month fee waiver for up to $500 million. However, the filing did not provide a precise launch date for listing and trading on NYSE Arca. It stated that it would occur “as soon as practicable after the effective date” of the registration.

According to Matt Hougan’s analysis, investor allocations to Ethereum will reflect its market capitalization. He highlighted Bitcoin’s 74% market cap dominance compared to Ethereum’s 26%, suggesting that this ratio is critical for predicting fund flows into the ETFs.

Looking at the European and Canadian ETP markets, where Ethereum exchange-traded products have drawn assets relative to their market capitalization, he predicted that a similar pattern might arise in the United States, resulting in significant inflows for the investment vehicle.

He further noted that Ethereum ETPs would need to accumulate around $35 billion by 2025 to replicate Bitcoin’s success. Hougan believes Grayscale’s anticipated conversion of its $10 billion Ethereum Trust into an ETF will catalyze this growth, with an additional $25 billion expected to accumulate over time, bolstering the ETF’s success prospects.

Addressing concerns about the lack of staking in Ethereum ETFs, Hougan argued that this would not significantly impact demand.

For instance, you could argue that Ethereum ETPs will underperform my estimate because they will not stake assets, lowering demand. I don’t think this is true—staking income is a rounding error on ETH’s average annual return, and I think ETP investors will be happy simply having exposure.

Matt Hougan

Though Hougan’s analysis presents a promising outlook for Ethereum ETFs, some analysts believe they may not achieve the same level of success as Bitcoin.

Will Ethereum outperform Bitcoin after the ETF launch?

K33 research analysts Vetle Lunde and David Zimmerman believe that the price of ETH may stumble soon after the launch of the ETFs. However, they added that similar to Bitcoin, inflows into spot funds would likely boost ETH’s price over time. 

The price of Ethereum is currently consolidating above the critical support at $3,200. ETH/USD is firm above a crucial bullish trend line, with current support at $3,240 on the weekly chart.

ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate, and I firmly view current ETH/BTC prices as a bargain for the patient trader. We maintain a bullish ETH outlook in anticipation of net inflows equivalent to 0.75-1% of ETH’s circulating supply in the five months following the launch.

Vetle Lunde

Still, the market “stubbornly” disagrees with their sentiments, as evidenced by Ether futures trading at a relative discount to Bitcoin futures and ETH trading at a rate of 1 ETH to 0.055 BTC.

Over the past 12 months, ETH’s value has steadily declined compared to Bitcoin, hitting a yearly low of 0.045 on May 24.

The SEC’s sudden decision to approve Ether ETFs quickly reversed the price of Ether relative to Bitcoin. According to TradingView data, ETH/BTC is up to 0.05453.

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Cryptopolitan Reporting by Florence Muchai