Bloomberg Expert Says Ethereum ETF Approvals Are Overhyped Compared To Bitcoin

Bloomberg Expert Says Ethereum ETF Approvals Are Overhyped Compared To Bitcoin

Crypto enthusiasts hoping for a game-changing Ethereum spot ETF debut may be disappointed, according to Bloomberg ETF expert Eric Balchunas. While the recent debut of various Bitcoin spot ETFs in the United States has been spectacularly successful, Balchunas believes a follow-up launch for Ethereum would be “small potatoes” in comparison to the original.

Do Ethereum ETFs Matter?

In a post to X on Saturday, Balchunas wrote:

“No offense to the ETH people but this is such small potatoes vs spot bitcoin ETFs. It’s like the opening act coming on after the headliner. Using GenX bands, it’s like Sister Hazel is trying to follow Nirvana.”

Balchunas added that his forecast is based on both anecdotal and public statistics, implying that the Ethereum ETFs will be “nothing close” to their Bitcoin-based counterparts, which have generated over $7 billion in net flows since their inception on January 11.

Before opening, asset managers fought a protracted legal battle with the Securities and Exchange Commission (SEC) to get Bitcoin spot ETFs licensed for public securities exchanges, citing substantial disputes over whether the Bitcoin market was vulnerable to foreign manipulation.
After Grayscale won a legal case against the agency last year, the business promptly registered to start an Ethereum spot ETF, followed by BlackRock and Fidelity, the three major issuers of Bitcoin spot ETFs today.

Ethereum VS Bitcoin ETFs: What We Know

Though many believe the SEC will be pushed to approve the product again, the market’s willingness to buy it remains uncertain. For example, Ethereum futures ETFs debuted in October of last year but produced minuscule flows and activity in comparison to Bitcoin’s first futures ETF in October 2021.

Looking at Canada’s top ETFs, the Purpose Ether ETF now has an AUM of $458 million CAD, compared to $2.5 billion for the company’s Bitcoin ETF. For reference, Ether’s worldwide market capitalization is around one-third that of Bitcoin, implying that it may be less popular as an ETF wrapper than BTC.

According to a Bitwise study of registered financial advisors conducted last year, 71% stated they preferred Bitcoin to Ethereum. In remarks shared with CryptoPotato in November, the asset manager noted that ETFs would be more important for Bitcoin than for Ethereum since institutional investors are generally unaware of the differences between the two assets.

Author: Simeon

Simeon is a seasoned crypto writer with a passion for exploring the fascinating world of blockchain and digital currencies. With a background in finance and technology, Simeon brings a unique perspective to his writing, delving into the complexities of decentralized finance, cryptocurrency trading, and emerging blockchain projects.

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