Galaxy Research has released a report predicting that Ethereum spot exchange-traded funds (ETFs) will experience significant market traction and net inflows of $1 billion per month once they are approved for trading. The report forecasts a total net inflow of $5 billion in the first five months of Ethereum ETFs being available. Galaxy analyst Charles Yu expects net inflows into ETH ETFs to be 20-50% of net inflows into BTC ETFs in the first five months, with a target of 30%, translating to $1 billion per month. The approval of initial applications for Ethereum ETFs by the SEC last month has set the stage for these inflows. Similar to Bitcoin ETFs, independent investment advisors and broker/dealer platforms are expected to drive demand for Ethereum ETFs. The report also highlights that Ethereum is more sensitive to ETF inflows compared to Bitcoin due to a significant portion of ETH being locked in staking, bridges, and smart contracts, as well as a lower amount of ETH held on centralized exchanges. However, Galaxy cautions that the lack of staking rewards and potential outflows from the Grayscale Ethereum Trust could constrain demand for spot Ethereum ETFs.
