Ethereum ETFs Set to Secure $15 Billion by 2025

The Ethereum ETF market is set to experience explosive growth, according to Matt Hougan, Chief Investment Officer at Bitwise. According to his forecasts, these new financial products could attract up to $15 billion in investments within 18 months of their launch. This estimate is based on an in-depth analysis of market potential and observed trends in the crypto sector.

Significant Growth Potential for Ether ETFs

The growing appeal of Ethereum as an institutional investment is reflected in Bitwise’s projections. Hougan anticipates that the Ether ETFs could account for about 26% of the combined Bitcoin-Ethereum market.

This significant share is explained by the current market capitalization of the second-largest crypto, which stands at $432 billion, indicating a substantial potential for capital inflows.

The launch of Ethereum ETFs will benefit from a significant advantage: the expected conversion of the Grayscale Ethereum Trust into an ETF, immediately bringing $10 billion in assets. This solid foundation could boost investor confidence and accelerate the adoption of these new financial products.

Projections Adjusted to Market Realities

While the prospects are promising, Hougan adopts a cautious approach in his estimates. He takes into account certain limiting factors, such as the slight underperformance of Ethereum ETPs compared to their absolute market capitalization weighting. This nuance led him to revise his initial expectations from $25 billion to $18 billion, excluding Grayscale trust assets.

Another element taken into consideration is the likely absence of “carry trade” for Ethereum ETFs, unlike what is observed with Bitcoin.

This particularity, notably due to the absence of staking for American Ethereum ETFs, led Hougan to further refine his projections, resulting in the final estimate of $15 billion in net inflows.

Bitwise’s optimism comes in an increasingly favorable regulatory context. Recently, VanEck, another major asset management player, filed Form 8-A for its Ethereum ETF project, signaling increased confidence in the upcoming approval of these products by the SEC.