Bitwise: Ethereum spot ETF will attract $15 billion in inflows

Matt Hougan, founder of ETF issuer Bitwise, speculated that the Ethereum spot ETF will attract US$15 billion in capital inflows within 18 months of listing.

Bitwise’s estimation method

The following is the way Bitwise estimates Ethereum spot ETF flow

• A rough estimate based on the market capitalization of Bitcoin/Ethereum

The starting point for estimating flow is BTC and ETH Relative market capitalization size.

• BTC: $1,266 billion (74%)
• ETH: $432 billion (26%)

US investors invested $56 billion in Bitcoin spot ETFs. Hougan estimates that by the end of 2025, as these commodities mature and are approved on platforms such as Morgan Stanley, this number will reach $100 billion, and at this rate, the asset management scale of Ethereum spot ETFs will reach 350 One hundred million U.S. dollars.

• Deduct ETHE’s assets

But Grayscale’s Ethereum Trust ETHE will directly convert $10 billion in assets into ETFs, and the net inflow after deductions should be $25 billion.

Compared with the figures in Europe and Canada, the proportions of Bitcoin and Ethereum seem to be not far apart.

However, Hougan still chose to use a conservative estimate of 22% of the market share in Europe and lowered the net inflow from US$25 billion to US$18 billion.

Assets minus arbitrage trades

There is also one major factor to consider: arbitrage trades. The U.S. Bitcoin Spot ETF may have up to $10 billion in assets related to arbitrage trades, with institutional investors buying the ETF and selling BTC futures contracts on CME.

However, considering that the ether held by the Ethereum spot ETF cannot be pledged, Hougan predicts that such arbitrage transactions will not occur in the Ethereum spot ETF, so the US$18 billion is revised down to US$15 billion.

$15 billion is still a huge success story

Hougan believes this will be a historic success story. Because only four ETFs have received $15 billion in inflows since January 2020. However, he does not believe that the inflow of funds is linear. Instead, there may be a net outflow due to the redemption of ETHE when it was first launched. But Hougan considers ETH to be one of the best-performing assets of all time and believes its best days are ahead of it.

Previous analysis by Bitfinex, using the example of gold and silver ETFs, estimated that Ethereum spot ETFs have the opportunity to capture 10-20% of the funds currently flowing into Bitcoin ETFs. Bloomberg ETF analyst Eric Balchunas estimated the performance of Ethereum spot ETFs. About 10% of Bitcoin spot ETFs would be quite good.

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