Bitcoin ETF vs. Ethereum ETF: Can Ether ETFs Surpass Expectations Despite Bitcoin’s Dominance?

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Eric Balchunas, a senior ETF analyst at Bloomberg, predicts that the upcoming Ether-based exchange-traded funds (ETFs) will not match the massive success of the U.S. spot Bitcoin ETFs. He describes Bitcoin as a “crypto hot sauce” that is well understood by investors, while Ethereum, with its complex decentralized finance (DeFi) ecosystem, is harder to explain. 

Balchunas sees Ether ETFs as a “sidekick” to Bitcoin ETFs, which have already set records with their initial inflows. This explosive revelation has opened a debate on ETH ETF’s overhyped status, and many are comparing it to the slow performance shown in Hong Kong. 

Bitcoin raised the bar, will Ethereum match the success, let’s hear from the horse’s mouth!

Who will win the ETF Race; Bitcoin vs ETH? 

Despite concerns that Ether ETFs might fall short of Bitcoin ETFs’ success, some experts are optimistic. Ophelia Snyder, co-founder of 21Shares, believes that while the Ether ETFs won’t reach the extraordinary levels of the Bitcoin ETFs, they will still be successful. She expects the Ether ETFs to perform well. 

Still, she acknowledges that Bitcoin ETFs set an exceptionally high bar, and the Ether ETFs should be judged against average ETF launches, not against Bitcoin’s record-breaking performance.

On the Flip Side

While Bitcoin ETFs are expected to see a huge surge in inflows, reaching $50 billion by 2025, Ethereum ETFs might attract around $15 billion in their first 18 months, with $500 million in the first week, according to Bitwise’s Matt Hougan. Some analysts are doubtful because Ethereum lacks Bitcoin’s “digital gold” status. However, Hougan believes investors have a strong affinity for technology and are actively following companies such as Nvidia and Meta.

Hence, to be successful, Ethereum will need to be positioned as a tech platform rather than just a cryptocurrency, and more innovative Ethereum-based products might be required to boost its appeal.

Launch Timeline and Regulatory Updates

In the meanwhile, the SEC is close to the approval process for the Ether ETFs, with Chair Gary Gensler noting that it is “going smoothly.” However, there is no clarity that the ETFs will launch before the November election.

Analysts speculate that the SEC might approve the Ether ETFs as early as the first week of July, as asset managers finalize their regulatory S1 filings. This launch will mark a significant moment for the crypto market, with anticipation for how it will affect investor sentiment and market dynamics.