Bernstein predicts lower demand for Ether spot exchange-traded funds (ETFs) compared to Bitcoin ETFs. Basically, same people and institutions are going to invest, yet Ethereum attracts less money from investors.
Yes, the broker's analysis suggests similar demand sources but on a reduced scale.
Gautam Chhugani and Mahika Sapra, analysts at Bernstein, highlight a key factor. "ETH should not see as much spot ETH conversion due to the lack of an ETH staking feature in the ETF," they state.
The basis trade is expected to attract interest over time. This should contribute to healthy ETF market liquidity. The trade involves simultaneous spot ETF purchase and futures contract sale.
U.S. spot ether ETFs are nearing availability. The Securities and Exchange Commission (SEC) recently approved key regulatory filings from issuers.
Bernstein's report emphasizes ether's growing use-case. "ETH as a primary tokenization platform is building up a strong use-case, both for stablecoin payments, as well as tokenization of traditional assets and funds," the authors note.
Regulatory improvements are needed for Ether and other digital assets. Bernstein anticipates a favorable narrative shift around the U.S. elections later this year. Probably because Trump has already changed his rhetorics about crypto, and Biden is about to follow.
The report cites improving odds of a Republican victory. It also notes Trump's pro-crypto stance as contributing factors.
Despite recent market pullbacks, Bernstein maintains that the "structural adoption cycle remains intact." Simply put, nothing can stop us from going to mass crypto adoption, in case you still had any doubt.
JPMorgan, a Wall Street giant, shares a similar view. Their recent report suggests spot ether ETFs will likely see much lower demand than bitcoin ETFs.
JPMorgan attributes this to bitcoin's first-mover advantage. They believe it could potentially saturate overall demand for crypto exchange-traded funds.