As an experienced financial analyst, I’ve seen my fair share of market excitement surrounding potential game-changing events. However, it’s crucial to approach such situations with a level head and a data-driven perspective. That being said, I find Andrew Kang’s take on the imminent launch of the Ethereum ETF intriguing.
According to billionaire cryptocurrency entrepreneur Andrew Kang’s perspective, shared on X, the introduction of a Spot Ethereum ETF wouldn’t have a significant positive effect, as he believes the market has already factored in this event.
Crypto market excitement at imminent ETF launch
VanEck’s recent 8-A filing for a Spot Ethereum ETF indicates that the product’s approval and subsequent launch could occur soon, following a similar timeline as when they filed for their Spot Bitcoin ETF, which was launched about a week after the filing.
The crypto community is buzzing with enthusiasm for this upcoming launch, and it’s likely that numerous investors have already purchased Ethereum ($ETH) in preparation. The widespread belief is that if the Ethereum Exchange-Traded Fund (ETF) performs similarly to its Bitcoin counterpart, then the price will undoubtedly surge.
A bucket of cold water
Andriew Kang, the Managing Partner at Mechanism Capital, expressed skepticism in a recent article on X about the potential for significant price increases in ETH. According to Kang, the Ethereum token’s economy needs to show marked improvement before any substantial upward momentum can be expected.
Spot Bitcoin ETF analysis
In his article, Kang initially examines the Spot Bitcoin ETF and points out that despite a total net inflow of $14.5 billion, not all of this represents “genuine inflows.” He breaks down these inflows into two categories:
According to Kang’s citation from Eric Balchunas, an estimated $0.5 billion could flow into an Ethereum ETF if it attracts 10% of the investments made in the Bitcoin ETF. However, Kang’s own estimate is slightly higher at approximately $0.84 billion.
Kang clarified that the increase in Bitcoin’s price from $40,000 to $65,000 was not primarily due to ETF buying. Instead, he attributed the surge to other buyers in the spot markets. Additionally, according to Kang, there exists a strong demand for Bitcoin this year, with an estimated flow ranging from $40 billion to over $130 billion.
Ethereum ETF expectations are overinflated
According to Kang, the enthusiasm of Ethereum’s crypto community may be excessively high. He expressed this perspective by saying:
People deeply involved in the cryptocurrency world tend to have a greater affinity and belief in Ethereum. However, among non-crypto natives or larger institutional investors, Ethereum holds significantly less weight as a significant allocation in their portfolios.
A billionaire analyst expresses his conviction that Ether’s value will fluctuate between $2,400 and $3,000 following its launch. However, if Bitcoin reaches $100,000 by the end of this year or in Q1 2025, it could potentially pull Ether to new all-time highs.
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2024-06-26 13:07