Title: Ethereum Spot ETFs: Analyst Presents Three Scenarios and Price Predictions
Summary: Florent Koenig, a macro analyst at SwissBorg, shares his insights on the potential impact of Ethereum Spot ETFs on the price of ETH. He presents three scenarios based on estimates from various experts and factors in the recent performance of Bitcoin ETFs. Koenig predicts different price levels for ETH by the end of 2024.
Macro analyst Florent Koenig from SwissBorg has analyzed the potential impact of Ethereum Spot ETFs on the price of ETH. He offers a detailed scenario of what can be expected when these ETFs start trading.
Estimating the inflows into Ethereum ETFs is a complex task. To obtain a range of expected values, Koenig relies on estimates from different experts. Here’s what he discovered:
– Goldman Sachs predicts that the new spot ETH ETFs will attract net inflows of $1 billion to $3 billion for the remainder of the year.
– Bloomberg Senior ETF Analyst Eric Balchunas believes Ethereum could capture around 15-20% of the inflows seen in Bitcoin ETFs.
– Bitwise CIO Matt Hougan suggests that ETH ETFs could see net inflows of 25% to 50% of Bitcoin ETFs in the first four months of trading.
– Grayscale’s research team expects spot ETH ETFs to have approximately 25%-30% of the demand of Bitcoin ETFs.
Using these estimates, Koenig creates a bear, bottom, and bull forecast for potential inflows into the ETH ETF by the end of 2024.
The question now is: How can we predict the impact of these potential inflows on the price of Ethereum? Koenig proposes making assumptions based on the recent spot Bitcoin ETF. He assumes that approximately 75% of Bitcoin’s recent price movement can be explained by ETF net inflows alone. This implies that net inflows of around $13.86 billion moved Bitcoin by approximately +37.5%. In other words, each billion in net inflows into ETFs is expected to move Bitcoin by +2.7%.
However, Bitcoin and ETH have their differences. Koenig takes other factors into account to estimate how much Ethereum could move for every billion dollars in net inflows:
– The fully diluted value of Bitcoin is currently about 3.15 times that of Ethereum.
– Approximately 27% of all Ethereum is staked.
– Ethereum’s supply has been following a deflationary (-0.184%) trend since the Merge.
Based on these factors, Koenig assumes that Ethereum is four times more reactive than Bitcoin, meaning that for the same inflow, Ethereum will move four times more than Bitcoin. Thus, each billion dollars in net inflows could potentially move Ethereum by +10.8%.
Taking all these factors into consideration, Koenig makes the following price predictions for Ethereum by the end of 2024:
– Bear scenario: ETH reaches $4,428.
– Base case scenario: ETH reaches $5,294.
– Bullish scenario: ETH reaches $6,730.
*Please note that this is not investment advice.
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