Bitwise CIO Estimates Spot Ether ETPs Will Attract Billions
Bitwise CIO Matt Hougan has predicted that spot ether-based exchange-traded products (ETPs) will perform favorably in financial markets once trading begins. Hougan estimates that these products will attract $15 billion in net flows during their first 18 months of trading, based on the performance of ether ETPs in other regions and their market capitalization.
Bitwise Forecasts Significant Interest in Spot Ether ETPs
Bitwise, a cryptocurrency-focused asset management firm, expects a significant influx of interest in ethereum exchange-traded products (ETPs) over the first 18 months of trading. In a memo sent to investors, Bitwise CEO Matt Hougan projects that ether-based spot investments will attract $15 billion during this period. Hougan stated that this estimate is based on data rather than a casual guess.
Market Capitalization Comparison
To arrive at this figure, Hougan analyzed the relative market capitalizations of Bitcoin (BTC) and Ethereum (ETH) in the current cryptocurrency market. Bitcoin has a market capitalization of $1,266 billion, which accounts for 74% of the combined market, while Ether has $432 billion, or 26%. Assuming Bitcoin ETPs will see $100 billion in inflows by the end of 2025, ether equivalents would need to attract $35 billion to achieve parity. However, considering the immediate conversion of Grayscale’s Ethereum Trust (estimated at $10 billion), the inflow estimate is adjusted to $25 billion.
Comparison with Other Markets
Hougan compared these figures to other markets where ether ETPs are already available. His analysis indicates that spot ether ETPs capture 22% of the combined BTC-ETH inflows in European and Canadian markets. Applying these percentages to the U.S. market, spot ether ETPs would potentially reach $18 billion in inflows. Adjusting for carry trade-related inflows, Hougan finally estimates a $15 billion inflow for spot ether ETPs.
