After weeks of anticipation, there appears to be a growing likelihood that Ethereum spot exchange-traded funds (ETFs) will soon be permitted to list on US stock exchanges.
Multiple reports have emerged indicating that the crucial S-1 registrations will likely receive approval next week, sparking widespread speculation about the potential influx of funds into these ETFs.
According to a new report from Galaxy Research, $5 billion could flow into these funds within the first five months after launch.
‘ETH Funds Attract 30% of BTC Inflows’
Galaxy Research analyst Charles Yu shared his expectations for the impending IPO of the batch of Ethereum funds in a new report released Wednesday. The report forecasted that crypto-focused financial services company Galaxy expects net inflows of $5 billion for the first five months after launch.
With this prediction, the capital inflow of the ETH funds would be significantly lower than that of the bitcoin spot ETFs launched in January.
“We expect net inflows into ETH ETFs to be 20-50% of net inflows into BTC ETFs over the first five months, with a target of 30%, which equates to $1 billion per month in net inflows,” Yu wrote.
The US Securities and Exchange Commission (SEC) approved all Ethereum 19b-4 ETF applications five weeks ago. Since then, many predictions have been shared in the Ethereum news that the stock market entry will be less successful than that of the American bitcoin funds. However, Galaxy believes that the Ethereum price will be more sensitive to ETF inflows due to the amount of ETH locked in staking contracts, bridges, and smart contracts.
The fact that the upcoming Ethereum ETFs will not stake the underlying ether is a key reason for Galaxy to believe that less capital will flow into the exchange products.
Ethereum ETF launch next week
The Ethereum ETF launch process appears to be finally reaching its final chapter. Two weeks ago, Bloomberg ETF analyst Eric Balchunas reported that the SEC had only shared light comments with ETF issuers on the S-1 registration statement filings. At the time, he predicted a launch date of July 2.
Yesterday, Reuters reported, based on anonymous sources, that the discussions with the SEC are in the final phase. The report noted that the funds are expected to make their debut on the stock exchanges next Thursday (July 4).