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Ethereum Spot ETFs: How Will They Impact ETH Price? Analyst Presents Three Scenarios and Predicts Three Prices
The launch of Ethereum Spot ETFs is expected to have a significant impact on the price of ETH. Florent Koenig, a macro analyst at SwissBorg, recently provided insights into what we can anticipate when ETH Spot ETFs start trading.
Predicting the potential inflows into Ethereum ETFs is a complex task. Koenig decided to gather estimates from various experts to get a range of expected values. Here’s what he discovered:
– Goldman Sachs predicts that the new spot ETH ETFs will attract modest net inflows of $1 billion to $3 billion throughout the rest of the year.
– Bloomberg Senior ETF Analyst Eric Balchunas believes that Ethereum could capture around 15-20% of the inflows seen in Bitcoin ETFs.
– Bitwise CIO Matt Hougan speculates that ETH ETFs could experience net inflows of 25% to 50% of Bitcoin ETFs in the first four months of trading.
– Grayscale’s research team expects spot ETH ETFs to generate approximately 25%-30% of the demand that Bitcoin ETFs receive.
Based on these estimates, Koenig developed three forecasts for potential inflows into the ETH ETF by the end of 2024: a bear scenario, a base case scenario, and a bullish scenario.
But how can we predict the impact of these potential inflows on the price of Ethereum? Koenig suggests making assumptions based on the recent spot Bitcoin ETF. It is assumed that approximately 75% of Bitcoin’s recent price movement can be explained by ETF net inflows alone. This means that net inflows of around $13.86 billion moved Bitcoin by approximately +37.5%. In other words, each billion in net inflows into ETFs is expected to move Bitcoin by +2.7%.
However, Bitcoin and ETH have their differences. Koenig took other factors into consideration to estimate how much Ethereum could move for every billion dollars in net inflows:
– The fully diluted value of Bitcoin is currently about 3.15 times that of Ethereum.
– Approximately 27% of all Ethereum is staked.
– Ethereum’s supply has generally followed a deflationary trend (-0.184%) since the Merge.
Based on these factors, Koenig assumes that Ethereum is four times more reactive than Bitcoin, meaning that for the same inflow, Ethereum will move four times more than Bitcoin. Therefore, every billion dollars in net inflows could potentially move Ethereum by +10.8%.
Taking all of this into account, Koenig made the following predictions regarding the price performance of Ethereum by the end of 2024:
– Bear scenario: ETH will be valued at $4,428.
– Base case scenario: ETH will be valued at $5,294.
– Bullish scenario: ETH will reach $6,730.
*Please note that this information is not intended as investment advice.
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