Investors are keenly observing the upcoming decision by the SEC regarding the approval of spot Ethereum ETF S-1 filings, which has the potential to trigger a widespread market upsurge. As per the latest report from K33 Research, there is a likelihood of Ethereum experiencing a supply scarcity as around 1.26 million ETH may exit exchanges within just five months post the launch of the ETF.
This anticipated scenario could lead to a notable surge in Ethereum prices, possibly reaching an all-time high. K33 Research's evaluation suggests that spot Ethereum ETFs might attract a remarkable $4 billion in inflows within the initial five months of their inception. The estimate is founded on a comparison of assets under management in existing Ethereum-based exchange-traded products globally with analogous Bitcoin products, along with the evaluation of open interest in futures contracts on the Chicago Mercantile Exchange, a pivotal market for institutional investors.
Currently, Ethereum's open interest on the CME stands at 23% of the size of Bitcoin futures. Noteworthy is the fact that since the commencement of ETH futures trading on the CME in 2021, they have acquired 35% of the BTC futures, indicating robust institutional demand for ETH. Comparing these figures with the $14 billion influx into spot Bitcoin ETFs, K33 Research envisions that spot Ethereum ETFs could potentially witness inflows ranging between $3 billion and $4.8 billion during the initial five months of operation.
At the current ETH price of $3,800, this projection implies an accumulation of 800,000 to 1.26 million ETH via these ETFs, constituting about 0.7% to 1.05% of the entire circulating ETH supply. Following the approval of the spot Bitcoin ETF, BTC prices surged by 60%, achieving historic peaks.
According to K33 Research's analysis, the launch of Ethereum ETFs could pave the way for Ethereum to outperform BTC after nearly two years of lagging behind. Moreover, the report underscores that eliminating the staking element from ETFs would not adversely impact capital inflows into the investment vehicle. Notably, 99% of the assets under management in Canadian ETH ETFs are invested in non-staking funds, while the corresponding figure for European products is 98%.
