According to the cryptocurrency asset manager Bitwise, the introduction of spot Ethereum (ETH) exchange-traded funds (ETFs) in the U.S. next week is expected to drive the price of the second-largest cryptocurrency above its all-time high of $5,000.

In a recently published report, Bitwise’s Chief Investment Officer Matt Hougan noted that the price surge might not occur immediately. Initial volatility could be seen due to outflows from the $11 billion Grayscale Ethereum Trust (ETHE) as it converts to an ETF. However, the long-term outlook remains bullish.

Hougan expressed confidence that if market inflows exceed expectations, Ethereum could reach new highs by the end of the year, with the potential for even higher prices.

The report highlighted Bitcoin’s (BTC) performance, showing a 25% increase since the launch of spot ETFs in the U.S. in January and a rise of over 110% since October of the previous year when the market began pricing in the potential launch.

Bitwise believes Ethereum spot ETFs will have an even greater impact due to several structural factors.

Firstly, Ethereum’s short-term inflation rate is currently at 0%, compared to Bitcoin’s 1.7% during its ETF launches. This zero supply creates significant demand. Additionally, unlike Bitcoin miners, Ethereum stakers do not need to sell, and 28% of ETH is staked, effectively removing it from the market.

Bitwise predicts that Ethereum spot ETFs will generate $15 billion in net inflows within the first 18 months of trading.

Supporting this optimistic forecast, a report from Steno Research last month projected that with anticipated ETF inflows and other market factors, ETH could reach at least $6,500 within the year.

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