Ethereum ETFs Set to Reach $10 Billion AUM in First Year, Says Sygnum Bank

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Ethereum ETFs Set to Reach $10 Billion AUM

YEREVAN (CoinChapter.com) — Spot Ethereum exchange-traded funds (ETFs) could reach $10 billion in assets under management (AUM) within their first year, according to Katalin Tischhauser, Head of Investment Research at Sygnum Bank. Tischhauser compared this projection to her expectations for spot Bitcoin ETFs, which she predicts will attract between $30 billion and $50 billion in the same period.

“Ethereum’s lesser name recognition is likely to mean slower adoption,”

she said before adding:

“With Ethereum’s market capitalization a third of Bitcoin’s, we expect the relative inflows to be in the 15-35% range versus Bitcoin, with a resulting forecast of $5 to $10 billion in the first year.”

Ethereum’s Appeal as a Smart Contract Leader and ETF Investment

Tischhauser emphasized Ethereum’s unique position in the crypto market. Unlike Bitcoin, often viewed as a store of value, Ethereum’s value comes from its role as a leading smart contract platform.

“Ethereum, as the leading smart contract platform, is the best single asset proxy for the crypto industry with its multitude of applications and use cases,”

she explained. This makes Ethereum attractive for those looking to invest in the broader crypto ecosystem.

Additionally, Ethereum ETFs provide a straightforward way for traditional investors to access the crypto market. Many investors are not equipped to handle direct crypto investments, so they prefer familiar and regulated products like ETFs.

Ethereum ETFs Could Boost Price with Growing Inflows

The launch of Ethereum ETFs has not yet significantly impacted Ether’s price. However, Tischhauser noted that substantial inflows into these ETFs could influence the price.

“When the net flows turn positive and accelerate, this will be a strong driver for the price of Ether,”

she stated. She also mentioned that strong inflows could lead to demand shocks due to Ethereum’s limited liquid supply.

Currently, the new ETH funds, excluding Grayscale’s ETHE fund with $6.7 billion in AUM, have reached $1.5 billion in AUM within their first seven days of trading. This early accumulation indicates growing interest among investors. Tischhauser added that if Ethereum inflows are similar to those for Bitcoin ETFs, ETH prices could potentially reach $6,000.

*ETH has been trading sideways for 5 months. Source: Tradingview*

Promising Start for New Ethereum ETFs Signals Investor Interest

The early performance of the nine new Ethereum ETFs shows promise. On July 31, these ETFs ended a four-day outflow trend with positive aggregate inflows, suggesting increasing market interest.

The growth in Ethereum ETF inflows highlights a fresh opportunity for investors to diversify their portfolios with crypto assets.

Ethereum Price Dips Amid Increased Trading Volume

At the time of writing, Ethereum (ETH) is priced at $3,174.08, experiencing a 4.48% decrease in value over the past 24 hours. The cryptocurrency’s market capitalization is approximately $381.69 billion, securing its position as the second-largest cryptocurrency by market cap.

The trading volume over the past 24 hours has surged by 35.34%, reaching $18.60 billion. This uptick in trading volume highlights a significant increase in market activity, despite the downward price movement. The volume-to-market cap ratio stands at 4.88%, indicating a robust level of trading relative to the cryptocurrency’s total market value.

A detailed examination of the price chart shows Ethereum’s decline from a recent high of around $3,322. The price experienced a sharp drop and continued to trend downward, reaching its current level. The market’s reaction suggests a potential consolidation phase or a broader market correction impacting Ethereum’s value.

Ethereum’s circulating supply remains at 120,251,314 ETH. The cryptocurrency’s total supply and maximum supply are both theoretically unlimited, consistent with Ethereum’s design and protocol.