Bitcoin
Ether (ETH) spot ETFs may see demand from the same sources as Bitcoin (BTC) versions, but on a smaller scale: Bernstein
Ether (ETH) Spot exchange-traded funds (ETFs), once approved for trading, will likely see the same sources of demand as bitcoin (BTC) ETF, but on a smaller scale, brokerage Bernstein said in a research report on Monday.
“ETH should not see as many ETH spot conversions due to the lack of an ETH staking feature in the ETF,” wrote analysts Gautam Chhugani and Mahika Sapra, adding that basic trading will likely find takers over time and this should contribute to healthy liquidity in the ETF market. Basic trading involves buying the ETF spot and selling the futures contract at the same time and then waiting for prices to converge.
Spot Ether ETFs are close to becoming available to investors in the US after the Securities and Exchange Commission (SEC) approved key issuer regulatory filings last month.
“ETH, as a primary tokenization platform, is building a strong use case for both stablecoin payments and tokenization of traditional assets and funds,” the authors wrote.
Ether and other digital assets need a “more enhanced regulatory regime” and Bernstein expects the narrative to improve around the US elections later in the year as the chances of a Republican victory continue to improve and because Trump is now pro-crypto.
“Despite the recent pullback in cryptocurrency markets, the “structural adoption cycle remains intact,” the report added.
Wall Street giant JPMorgan said spot ether ETFs will likely see much lower demand than bitcoin ETFs, noting that the world’s largest cryptocurrency had first-mover advantage and could potentially saturate overall demand. by crypto exchange-traded funds, it said in a report last month.