Bernstein analysts have released a report on their perspective regarding Ethereum spot exchange-traded funds (ETFs), predicting that they will garner demand, but likely on a smaller scale than Bitcoin ETFs. The analysts anticipate that once approved, Ethereum spot ETFs will attract the same demand sources as Bitcoin ETFs, but will not reach the same volume. They also highlighted the absence of Ethereum staking features in the ETF, which could limit the conversion to spot ETH. Additionally, the report pointed out that basis trading, involving buying the spot ETF and simultaneously selling the futures contract to await price convergence, will contribute to liquidity in the ETF market over time. The U.S. Securities and Exchange Commission’s recent approval of regulatory filings has brought spot ether ETFs closer to being available to U.S. investors. The report emphasized Ethereum’s strong use case for stablecoin payments and traditional asset tokenization. It also suggested that a more robust regulatory framework for Ethereum and other digital assets could improve the narrative in the upcoming U.S. elections, particularly if there is an increased likelihood of Republicans winning and Trump’s pro-crypto stance. Despite recent downturns in the crypto markets, Bernstein’s report argued that the structural adoption cycle remains intact. However, JPMorgan has reiterated the sentiment of lower demand for ETH ETFs compared to BTC ETFs, citing Bitcoin’s first-mover advantage potentially saturating overall demand for crypto exchange-traded funds. Please note that this is not investment advice.
