According to a team of JPMorgan analysts led by Nikolaos Panigirtzoglou, investment volumes in ETH spot ETFs will be much lower compared to similar Bitcoin products.
“The initial market reaction to the launch of spot Ether ETFs is likely to be negative. We believe that demand for shares of spot Ether ETFs will be a fraction of the demand for Bitcoin ETFs,” the report notes.
Indeed, Bitcoin funds appeared first and “absorbed” most of the demand for investment in crypto assets. Currently, over $10 billion has been invested in each of the Bitcoin ETFs from BlackRock and Fidelity. In addition, the companies are removing the concept of staking from applications for launching spot ETFs for ether, which makes such funds less attractive to investors.
Panigirtzoglou’s team emphasized that Ether’s capitalization is significantly lower than that of the first cryptocurrency, as is its liquidity. Therefore, by the end of the year, analysts expect an influx of $1 billion to $3 billion into spot ETFs for ether. However, if companies somehow manage to negotiate with the US Securities and Exchange Commission (SEC) to offer staking for assets in ETFs, then this could triple demand. To do this, however, it is necessary for Congress to approve the status of ETH as a commodity.
Previously, JPMorgan experts noted that approving the launch of spot ETFs on ether was more of a political decision than a market one.
Source: Bits
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