Spot Ethereum(ETH) exchange-traded funds (ETFs) could capture a significant chunk of investment currently flowing towards Bitcoin ETFs, according to industry analysts. This news comes as the wait for a green light on these Ethereum-based ETFs continues.
Ethereum ETFs: A Shot at Bitcoin’s Dominance?
Jag Kooner, Head of Derivatives at Bitfinex, predicts that spot Ethereum ETFs could attract 10-20% of the investments currently directed towards their Bitcoin counterparts. However, a key factor influencing this figure is the stance of the U.S. Securities and Exchange Commission (SEC) on staking within these Ethereum ETFs. Staking allows investors to earn rewards for holding Ethereum, and the SEC’s decision on its inclusion could significantly impact investor interest.
History Repeating Itself: Gold Rush for Ethereum?
Kooner draws parallels between the potential launch of Ethereum ETFs and the introduction of gold ETFs. Similar to how new gold ETFs attracted investment, potentially impacting existing gold-related financial products, Ethereum ETFs could prompt fund managers to rebalance their portfolios, allocating resources towards both Bitcoin and Ethereum.
Also Read: Can Bitcoin Revolutionize Central Bank Gold Reserves? Gabor Gurbacs and Michael Saylor Weigh In
A Diversification Play: Spreading Risk and Chasing Returns
Kooner highlights the historical trend of fund managers diversifying their ETF portfolios to manage risk and potentially boost returns. He cites the launch of the SPDR Gold Trust (GLD) in 2004, which revolutionized gold trading by offering easy access for investors. Similarly, the introduction of silver ETFs, like the iShares Silver Trust in 2006, witnessed increased investor interest due to the rising industrial demand for silver. Kooner suggests a similar pattern might emerge for Ethereum ETFs, driven by the diverse use cases of the Ethereum blockchain.
Ethereum Price Update
While the future of Ethereum ETFs remains uncertain, the price of Ethereum(ETH) itself has experienced a slight dip. As of June 10th, 2024, Ethereum is trading at $3,667, down 0.65% in the last 24 hours. The broader cryptocurrency market also reflects a decline, with the GM 30 Index, representing the top 30 cryptocurrencies, dropping 1% in the same period.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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