TLDR:
- The price of Ether could drop to $2,400 following the launch of spot Ether exchange-traded funds (ETFs), according to Andrew Kang, a crypto VC founder.
- Kang predicts that Ether ETFs may attract around 15% of the flows seen by spot Bitcoin ETFs.
The price of Ether could experience a significant drop to as low as $2,400 following the launch of spot Ether exchange-traded funds (ETFs), representing a nearly 30% fall from its current price. Andrew Kang, a founder and partner at Mechanism Capital, a crypto-focused venture capital firm, shared his insights. He highlighted the differences between Bitcoin and Ether in terms of institutional interest and network cash flows. Kang suggests that Ether attracts less institutional interest compared to Bitcoin, and there are limited incentives for converting spot Ether into ETF form.
If Kang’s prediction holds true, it would mark a significant backtrack for Ether, considering it reached over $4,000 in March during Bitcoin’s new all-time high. The price almost reached that level again shortly before the SEC approved Ether ETFs. Kang expects spot Ether ETFs to attract around 15% of the flows seen by spot Bitcoin ETFs. The surprise approval of spot Ether ETFs may limit the time for issuers to market their products to institutional investors.
Several prominent asset managers have submitted revised proposals for Ethereum ETFs to the SEC. The filings by VanEck, BlackRock, Grayscale, Invesco Galaxy Digital, and Fidelity aim to provide updated information on their respective Ethereum funds. VanEck’s filing disclosed a management fee of 0.20% for its Ethereum fund, which is in line with competitors. Balchunas suggested that VanEck’s fee announcement puts pressure on BlackRock to keep their management fees below 30 basis points (0.30%) at the very least.
