Ethereum spot exchange-traded funds (ETFs) are within reach, but while enthusiasts are bracing for an influx of capital into the products, a cross-section of industry players are predicting a slow and steady flow of investments.
Binance CEO Richard Teng shares this sentiment with the cryptocurrency executive, arguing that Ethereum spot ETFs will not have the same impact as its Bitcoin (BTC) counterparts. After Bitcoin spot ETFs received regulatory approval from the US Securities and Exchange Commission (SEC), the products recorded nearly $2 billion in the first three days.
However, Teng opines that Ethereum may receive a different reaction from the markets than Bitcoin, citing prevailing macroeconomic conditions. The Binance CEO noted that while early inflow may appear lackluster, funds are still expected to be deployed in the products over the coming months.
“While we anticipate a steady capital deployment into these ETFs, it is unlikely to be dramatic initially and will fluctuate based on various macroeconomic factors,” said Teng.
For the CEO, retail investors may be the early adopters of spot ETFs, but over the long term, institutional players are expected to “provide a stable and substantial” inflow to the products. Not wanting to write off Ethereum ETFs, Teng notes that they have a series of positives working in their favor, including the recent upswing of the broader cryptocurrency markets.
At the moment, the market capitalization of the global virtual currency market stands at $2.38 trillion, compared to the $1.7 trillion valuation at the start of the year. A growth of nearly 30% in six months is considered a boon for ETFs in the long run, boosting investors’ confidence and sector liquidity.
Tom Dunleavy, managing partner at digital asset investment firm MV Global, opines that Ethereum spot ETFs could attract as much as $10 billion after the first few months of approval from the SEC.
Just around the corner
After the SEC ordered asset managers seeking to roll out their ETFs to submit final S-1 filings in mid-July, a move widely considered to be the last piece of the puzzle for final approval. Industry sources opine that the ETFs will hit the markets on July 23 with VanEck, BlackRock and Franklin Templeton angling to go live with their products.
In the lead-up to the approval, ETH currently trades at $3,495, rising by 1.01% over the last week. Traders are bracing for a short-term rally following the SEC’s approval, which many believe could set a new all-time high for the second-largest digital asset by market capitalization.
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