Yahya 
Matt Hougan, Chief Investment Officer of Bitwise, says United States spot Ether exchange-traded funds (ETFs) would have a rough start but might eventually impact Ether’s price more dramatically than Bitcoin ETFs did for BTC.
Initial Volatility and Long-Term Potential
Hougan expects the first few weeks to be stormy as money may leave the $11 billion Grayscale Ethereum Trust (ETHE) once it changes its structure to be an exchange-traded entity. “After the $11 billion Grayscale Ethereum Trust (ETHE) converts to an ETP, money could flow out of it and the first few weeks could be choppy,” Hougan said.
He also pointed out that given possible selling pressures comparable to those seen by spot Bitcoin ETFs when they opened on January 11, major outcomes should not be anticipated right away. Hougan, however, remains hopeful about the long run and projects fresh highs by the end of the year.
Key Factors Behind the Bullish Outlook
Hougan listed three primary reasons why Ether ETFs may affect the price of the asset more so than Bitcoin ETFs:
- Zero Inflation Rate: Given the few ETH produced everyday, the widespread use of Ethereum-based apps has produced an effective 0% inflation rate for Ether.
- Staking vs. Mining Costs: Because Bitcoin miners must use high-end computer processors and use a lot of energy, they incur major running expenses as compared to miners of other cryptocurrencies. Those staking ETH, on the other hand, have less direct expenses.
- Staked ETH Supply: About 28% of all ETH is now staked and locked away, therefore limiting the available supply and driving price pressure upward.
Price Predictions
From its present price of $3,401, Hougan forecasts that the spot Ether ETFs, set to launch on July 23, may drive Ether’s price beyond $5,000 by the end of 2024, therefore signifying a 47% gain from its current price. He says the price may climb much more if inflows surpass market estimates.
“The price might be much higher still if flows are stronger than many market analysts predict” he said. Pseudonymous crypto trader Daan Crypto Trades agrees that the possible inflows into Ether ETFs are underappreciated. Daan Crypto Trades also pointed out that Ether’s price is above the 200-day Moving Average (MA) and may break out around the ETF introduction.
On the other hand, another trader, Kaleo, has a contrarian perspective and forecasts Ether’s price on the ETF debut to be down. “Gonna be a contrarian here and say that I believe Ethereum actually dips a bit next week versus. BTC,” Kaleo said.
Market Sentiment and Potential Liquidations
Hougan is hoping Ethereum will hit $5,000 by year’s end, but futures traders are hedging against a near-term drop. Based on CoinGlass statistics, a 10% rise to $3,750 could produce $1.31 billion in short liquidations; a 10% decline may wipe $544.39 million in long holdings.
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