Spot Ethereum ETFs May See Less Demand Than Spot Bitcoin ETFs Due to Lack of Staking Features, Analysts at Bernstein Say

InanewresearchreportpublishedonMonday,BernsteinanalystssuggestedthatSpotEthereumETFswilllikelyexperienceawaneininvestordemandfollowingitslaunch.

BernsteinanalystsarebearishonSpotEthereumETFsprospects,predictinglessdemandthanSpotBitcoinETFsduetoalackofstakingfeatures.AccordingtoBernsteinanalystsGautamChhuganiandMahikaSaprainaresearchreportpublishedMonday,SpotEthereumETFsaresettoexperienceadecreaseininvestordemandfollowingtheirlaunch.Theanalystsforeseeapessimisticoutlookfortherecentlyapprovedinvestmentasset,notingthattheenthusiasmforEthereumSpotETFsmightbeonasmallerscalethantheinitialexcitementforSpotBitcoinETFs.ChhuganiandSapraattributetheirbearishpredictionstothelackofETHstakingfeaturesinSpotEthereumETFfilings.However,theynotethatthe“basisoftrade”forSpotEthereumETFsmaylikelyimproveovertime,attractingmoreinvestorsandultimatelyimprovingliquidity.TheanalystsexplainthatthebasisofthetradewouldinvolveastrategywhereinvestorspurchaseSpotEthereumETFsandsellfuturescontractswhilewaitingforpricestoconverge.ThisapproachwouldpotentiallyensurethattheETFmarketgainsampleliquidityandsustainability.ConsideringBernstein’sbearishoutlookforSpotEthereumETFs,apotentialdropininvestordemandcouldleadtosignificantlyreducedinflows.ThisoutcomewouldbeastarkcontrasttothestronginflowsobservedafterthelaunchofSpotBitcoinETFs.AftertheUnitedStatesSecuritiesandExchangeCommission(SEC)approvedSpotBitcoinETFsonJanuary10,anditlaunchedadayafter,millionsofinflowsfloodedthemarketwithinafewdays,fueledbyinvestors’demandandprioranticipationforthedigitalassets.ThesemassiveinflowsalsocontributedtoBitcoin’srisetonewall-timehighsabove$73,000.BloombergAnalystReinforcesEthereumETFsLaunchDateSpotEthereumETFsarelikelytohitthemarketbyJuly2024.AccordingtoseniorBloomberganalyst,EricBalchunas,assetmanagementfirm,VanEckhasfiledits8-AformforSpotEthereumETFs.TheanalystdisclosedinanX(formerlyTwitter)postthatapproximatelysevendaysafterVanEckfiledthesameformforSpotBitcoinETFs,theETFslaunched.Uncanningly,July2,aboutsevendaysafter  VanEck’srecent8-Afiling,isthedateBalchunaspredictedforthelaunchofSpotEthereumETFs.TheBloomberganalysthasdoubleddownonhispreviousprediction,indicatingthatEthereumSpotETFscoulddebutonthisdate.Respondingtohispost,acryptocommunitymemberinquiredabouttheinclusionofstakinginfeaturesfortheEthereumSpotETFs.Balchunasclarifiedwitha“no,”indicatingtheSEC’sconcernsabouttheclassificationofstakingasanunregisteredsecurity.ThecommunitymemberfurtherpointedoutthattheabsenceofstakingwouldrenderEthereumSpotETFssignificantlylessappealingthantheirBitcoinversions.

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