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Ethereum ETFs Should Attract Roughly 33% the Inflows of Bitcoin ETFs: Galaxy Digital

July 08, 2024

Crypto firm Galaxy Digital is forecasting how Ethereum (ETH) exchange-traded funds (ETFs) will stack up to Bitcoin (BTC) ETFs.

According to a new research post from Charles Yu, the firm’s vice president of research, Ethereum ETFs will see roughly one-third of the inflows of similar Bitcoin products.

To reach their estimate, Yu says the firm compared the two assets’ market cap, open interest levels and volume in futures markets, and the total assets under management (AUM) across existing funds.

“Based on the above, we think that ether spot ETF inflows will be approximately 3x less than US spot bitcoin ETF inflows (in line with the cap multiple) with a range of 2x to 5x. In other words, we think that ether spot ETF inflows could be 33% the size of US spot bitcoin ETF inflows with a range of 20% to 50% of size in dollars.

Applying this multiple to $15bn of bitcoin spot ETF inflows through June 15 would imply monthly ETH ETF inflows of ~$1.0bn for the first five months following ether ETF approval and launch (est. range: $600m to $1.5bn / per month)…”

Yu further asserts that ETH ETFs should have an overall positive impact on the ETH markets for three main reasons:

“(i) expanded accessibility across wealth segments,

(ii) greater acceptance through formal recognition by regulators and trusted financial services brands. An ETF enables greater reach for both retail and institutions, provides wider distribution through more investment channels, and can support the case for ether in a portfolio to be used across more investment strategies.

In addition, a greater understanding of Ethereum by financial professionals would ideally result in accelerated investments and adoption of the technology.”

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