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Why the Spot Ethereum ETF May Follow the Bitcoin ETF Path?

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On June 4, K33 Research shared its expectations on spot Ethereum Exchange Traded Funds (ETFs). According to the report, the ETFs would attract between $3.1 Billion and $4.8 Billion in net inflows in the initial months. Moreover, the spot Ethereum (ETH) ETF was supposed to behave like a spot Bitcoin ETF.      

What Does the K33 Research Report Say on Spot Ethereum ETF?

K33 Senior Analyst Vetle Lunde and DeFi Analyst David Zimmerman shared some insightful details on the spot Ethereum ETFs. According to them, approximately 1 Million ETH coins would be absorbed by the ETF after trading begins. 

At the press time, ETH indicates a bullish trend, hovering at $3,815.75 after an intraday surge of 1.17% with a market cap of $457,390,862,901.   

The same was highlighted by K33 Research on X. 

According to analysts, 3.3% of the circulating supply of ETH has been in the investment phase, on a steady downtrend since the 2021 bull market peak. The pattern is more similar to Bitcoin (BTC) investments at the time of the spot Bitcoin ETF launch. 

After approval, BTC ETFs experienced a sharp growth to 5.6% of the circulating supply. If the ETH ETF follows the same pattern, the upcoming trading will attract over $3.1 Billion and $4.8 Billion in net inflows. 

Compared with the current ETH price of $3,815.75, the supply adsorption was estimated at over 800,000 ETH to 1.26 million ETH, 0.7%-1.05% of the circulating supply.     

How Far Has the Spot Ethereum ETF Process Reached?

After the approval of the 19b-4 form on May 23, the applicants are waiting for S-1 approval, after which the ETFs can offer trading services. Most of the Spot Ethereum ETF applicants have submitted their S-1 amendments. 

James Seyffart, Bloomberg’s ETF analyst, used the X platform to share the progress of the spot Ethereum ETFs process. 

As per the tweet, VanEck, Invesco Galaxy, Franklin, Grayscale, and BlackRock have submitted their filings. Seyffart also unveiled that Franklin, a leading provider of contract temporary services, is coming with a 0.19% fee. 

Furthermore, other applicants haven’t disclosed their fee structure yet. However, the community reacted to the fee cited by Seyffart.  

Community’s Reaction

Responding to Seyffart’s tweet, the crypto community debated on the fee of Franklin as well as Grayscale. Most of the members, including Colin Talks Crypto, think that Grayscale will alter its fees and are waiting for the next move. 

Many members are relating Grayscale’s fee structure to the replacement of Grayscale’s current CEO, Michael Sonnenshein, with Peter Mintzberg in August 2024. The crypto community was betting that a change in CEO would result in a fee drop. 

ETH Price I Source: CoinMarketCap

Despite the delays, ETH showcased an outstanding performance, surging from $3,765.58 on June 4 to $3,815.75 at press time. Moreover, the cryptocurrency recorded a spike of 6.91% in 24-hour volume and reached $14,483,097,775.        

The total and circulating supply of ETH was 120,148,358 ETH. 

Disclaimer

The analysis given above is for informational and educational purposes only. You should not take it as financial, investment, or other advice. Investing in or trading crypto assets is risky. Please consider your circumstances and risk profile before making any investment decisions.

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