Spot Ether ETFs May Lag Behind Bitcoin ETFs in Investor Inflows

The launch of United States-based spot Ether exchange-traded funds (ETFs) may not generate the same excitement and inflows as the groundbreaking debut of spot Bitcoin ETFs. According to Eric Balchunas, senior ETF analyst at Bloomberg, the upcoming spot Ether ETFs are likely to play second fiddle to their more established Bitcoin counterparts.

Balchunas emphasized that Bitcoin's straightforward value proposition as "digital gold" makes it more accessible and appealing to traditional retail investors. In contrast, Ethereum's complex decentralized finance (DeFi) ecosystem resembles a tech stock, which can be more challenging to understand.

Despite this, some industry experts maintain a positive outlook for the Ether ETF launch. The comparison to Bitcoin ETFs sets an unrealistic benchmark, the Ether ETFs will still achieve notable success and will perform significantly better than the average ETF launch, potentially ranking in the top decile of ETF launches.

The inflows seen during the Bitcoin ETFs launch were extraordinary. The US-based spot Bitcoin ETFs accumulated over $701 million in Bitcoin within the first week and exceeded $540 billion by the second week of trading.

On June 25, Securities and Exchange Commission (SEC) Chair Gary Gensler reported that the Ether ETF launch process is progressing smoothly in the US. However, he did not specify whether the ETFs would be available before the November election. The SEC has already approved 19b-4 filings from eight ETF bidders as of May 23, but asset managers are still refining their final Form S-1 filings required for trading approval. Some analysts anticipate that the SEC could greenlight these funds for trading as early as the first week of July.