Ether ETFs Expected to Boost ETH Prices Significantly by Year-End

Three Key Reasons for Price Surge

Bitwise Chief Investment Officer Matt Hougan believes that United States spot Ether exchange-traded funds (ETFs) will have a significant impact on Ether (ETH) prices, potentially more so than Bitcoin ETFs did for BTC. Hougan anticipates that the first few weeks could be turbulent as funds may flow out of the $11 billion Grayscale Ethereum Trust (ETHE) after its conversion to an exchange-traded product (ETP).

Three Key Reasons for Price Surge

Hougan outlines three main reasons for the expected price surge:

Minimal Inflation Rate: Ether’s inflation rate is effectively zero due to the widespread use of Ethereum-based applications compared to the small amount of ETH created daily.

Cost-Efficiency of Staking: Unlike Bitcoin miners who need to sell BTC to cover operational costs, those staking ETH do not have significant direct costs.

Significant ETH Staking: About 28% of all ETH is currently staked and locked away, effectively removing it from the market.

Optimistic Price Predictions

Despite an expected choppy start, Hougan is confident that Ether will reach new highs by the end of 2024. He predicts that the price could surpass $5,000, a 47% increase from its current price of $3,401. This optimism is shared by pseudonymous crypto trader Daan Crypto Trades, who believes that the potential inflows into Ether ETFs have been underestimated.

Diverging Market Opinions

While Hougan and some traders are optimistic about Ether’s price surge, others are more cautious. Pseudonymous trader Kaleo expects a dip in Ether’s price following the ETF launch, suggesting that the price may spiral downward initially.

Market Implications

With the spot Ether ETF expected to debut on July 23, as reported by Bloomberg ETF analyst Eric Balchunas, the crypto community is keenly watching the market. The potential for significant price movements and broader market impacts hinges on the reception and inflow dynamics of these new ETFs.

Stay tuned for further updates as the launch date approaches and the market responds to these significant developments.

Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Ether ETFs

Sujit Kumar

Sujit received his Bachelors in Science from the LNMU Darbhanga. He is currently working as a Content Strategist. He has more than three years of professional experience in information systems, security policies, technologies, and Cryptocurrency. He has published 6 books in the area of information security and assurance. He has published more than 50 research articles in leading journals Regarding the Latest and Breaking Crypto News and updates. His research interests include access control, computer forensics, Digital Marketing, Web development, business hacks, player experience, and virtual storytelling.