TLDR:
- Andrew Kang, a founder and partner at Mechanism Capital, predicts a 30% dip in Ethereum price to $2,400 after the launch of spot Ethereum exchange-traded funds (ETFs).
- Despite high expectations, Kang attributes his bearish outlook to limited institutional interest in Ethereum, lack of incentives for investors to convert spot Ether into ETFs, and unimpressive network cash flows.
Andrew Kang, a crypto-focused venture capital firm’s founder and partner, warns of a potential 30% dip in Ethereum price to $2,400 after the launch of spot Ethereum exchange-traded funds (ETFs). This forecast marks a significant decline from Ether’s current trading price of $3,410. Kang attributes his bearish outlook to Ethereum’s limited institutional interest compared to Bitcoin, lack of investor incentives to convert spot Ether into ETFs, and unimpressive network cash flows. Despite high expectations, Kang believes that Ethereum’s price range after ETF launch will be between $2,400 and $3,000. While some analysts share his pessimistic view, others like Dynamo DeFi expect Ether’s price to mirror the performance of spot Bitcoin ETFs. However, Kang doubts these expectations and questions the current valuation metrics, criticizing the 300x price-to-sales ratio, $1.5 billion 30-day annualized revenue, and negative earnings/price-to-earn ratio. He argues that the surprise approval of the ETFs gives issuers less time to promote them to institutional investors, potentially impacting broader uptake. Kang also highlights the exclusion of staking from proposed spot ETH ETFs as a limiting factor. While some firms have already launched Ethereum-themed advertisements, the limited time could affect institutional adoption. Despite differing opinions, Kang’s cautious outlook on Ethereum’s future amidst the ETF launch remains noteworthy.
