- Lower institutional interest in $ETH compared to $BTC.
- Greater complexity in understanding $ETH.
- Lower trading volumes in $ETH futures compared to $BTC (10-20%).
- Lower spot trading volumes of $ETH relative to $BTC (about 50%).
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$ETH’s market cap being approximately one-third of $BTC’s.
Given that $BTC ETFs have seen about $13 billion in net flows since their launch, Nadeau suggests that if $ETH achieves 10-20% of this figure, it would result in $1.3-$2.6 billion in net inflows for $ETH ETFs.
Nadeau draws a parallel between $BTC’s price surge after the US-listed spot Bitcoin ETFs launched and potential movements in $ETH. $BTC saw a 75% gain from $40,000 to $70,000 shortly after its spot ETFs started trading, leading Nadeau to expect a similar performance from $ETH, potentially pushing it past its previous all-time high of $4,800.
Several factors could contribute to $ETH’s outperformance:
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$ETH validators do not have the same “structural sell pressure” as $BTC miners, who need to sell a portion of their mined coins to cover operating expenses.
- A significant portion (38%) of $ETH supply is “soft locked” on-chain, earning yield in staking contracts, DeFi applications, or as collateral.
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$ETH balances on exchanges are at their lowest since 2016, suggesting less sell pressure.
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$ETH’s reflexivity could amplify price movements, with price action leading to more on-chain activity, more $ETH burned, and further narrative-driven price increases.
Nadeau envisions $ETH not just as a cryptocurrency but as a technology play on the growth of Web3, offering a larger addressable market than $BTC, which is viewed as “digital gold.”
Nadeau extends his analysis to the broader crypto market, expressing a highly bullish outlook. He anticipates favorable conditions driven by several cycles:
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Innovation Cycle: Continued advancements in blockchain technology and DeFi.
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Macro/Liquidity Cycle: Favorable economic conditions and increased liquidity.
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Election Cycle: Political developments influencing market sentiment.
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Bitcoin Halving Cycle: Historical patterns showing price increases post-halving.
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ETF Approvals: Increased accessibility and interest through $BTC and $ETH ETFs.
He points out that regulatory concerns have lessened, particularly with the market no longer fearing aggressive actions from regulators like Gary Gensler.
Using a hypothetical $10 trillion market cap for crypto, he makes the following predictions:
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$BTC at 40% of the market cap would reach $4 trillion, translating to a price of $202,000 per $BTC.
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$ETH at 45% of $BTC’s market cap would reach a $1.8 trillion market cap, implying a price of $14,984 per $ETH.
He points out that this assumes no change in supply from current levels. He also mentions that even more conservative estimates suggest significant price increases for both $BTC and $ETH.
cryptoglobe.com
