A recent forecast suggests that the inflows to the Ethereum ETF could push the price of Ethereum to new record highs above $5,000. Currently, Ethereum is priced at $3,456.12, showing a 1.0% increase in the last 24 hours.
Matt Hougan, the chief investment officer at Bitwise, a cryptocurrency manager, believes that the impact of ETF inflows from Ethereum could be even greater than that of Bitcoin ETFs on the price of Ethereum. He stated, “ETP flows could have an even greater impact on Ethereum than they did on Bitcoin.” Hougan predicts that these flows could propel the price of ETH to reach new heights, surpassing the $5,000 mark.
However, Hougan also noted that this price target for Ethereum may not be reached immediately. He expects the first few weeks to be volatile as money could flow out of the $11 billion Grayscale Ethereum Trust (ETHE) after its conversion to an ETP. Nevertheless, he remains confident that new highs will be achieved by the end of the year. If the flows turn out to be stronger than anticipated, the price could potentially be even higher.
Hougan emphasized that the launch of new Ethereum ETPs will attract significant investments, potentially in the billions. He outlined three structural reasons why the money flowing into these ETPs will have a larger impact than it did with Bitcoin: ETH’s lower short-term inflation rate, the fact that ETH stakers do not need to sell like BTC miners, and the fact that 28% of ETH is staked and therefore not available on the market.
In summary, Hougan believes that the approval of Ethereum ETFs and network upgrades could lead to Ethereum reaching new all-time highs. He predicts that around $15 billion could flow into these ETFs over the next 18 months. However, it’s important to note that the views expressed in this article are for informational purposes only and should not be considered as financial or investment advice. Investing or trading cryptocurrencies carries a risk of financial loss.