Ether Price To Smash $5,000 Record Highs Thanks To Spot ETH ETF Inflows, Predicts Bitwise CIO

Bitwise CIO Matt Hougan has predicted that the debut of spot ether (ETH) exchange-traded funds (ETFs) in the U.S., expected to happen next week, will propel the price of the industry’s second most valuable cryptocurrency to lifetime highs above $5,000, although it may not happen immediately.

Bitwise CIO Sees Ether Hitting $5K

Matt Hougan, the chief investment officer at Bitwise’s crypto asset management, believes spot Ether ETF inflows could have a greater impact on Ethreuem than the BTC exchange-traded funds did for Bitcoin.

In a Tuesday research report, Hougan noted that Ether’s price action in the first few weeks after the ETFs officially start trading may be “choppy” as capital flows out of the $11 billion Grayscale Ethereum Trust (ETHE) after its transformation to an exchange-traded fund.

However, “by year-end, I’m confident the new highs will be in,” Hougan opined, “and if flows are stronger than many market commentators expect, the price could be much higher still.”

Spot ETH ETFs are on the cusp of becoming available for trading on U.S. stock exchanges after the Securities and Exchange Commission (SEC) greenlighted eight so-called 19b-4 forms from asset managers like Bitwise, BlackRock, Fidelity, VanEck, Invesco, Ark Invest, Franklin Templeton, and Grayscale in late May. Once the S-1 filings are approved, the new investment vehicles will go live, and this could happen as soon as July 23, according to reports.

Ether ETFs Inflows Will Eclipse Bitcoin ETF Impact

Bitwise notes that Bitcoin has increased by more than 24% since the January launch of spot BTC ETFs in the U.S. and over 100% since the investors started pricing in the potential debut last October.

The cash flowing into new Ether ETFs will have a bigger impact on price than it did for Bitcoin because of three key factors: Ethereum’s slowed supply growth due to its burn feature, fewer sellers as stakers replace miners, and 28% of ETH supply locked in staking. Hougan expects spot Ether ETFs to be a resounding success and attract $15 billion of net inflows in their first 18 months of trading.

Ether was changing hands at $3,464.54 as of press time amid broader tailwinds in the crypto market.

If the spot Ether ETFs are successful, witnessing the level of inflows, Hougan anticipates, “it’s hard to imagine Ether not challenging its old record, his note summarized.