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Florent Koenig, macro analyst at SwissBorg, recently shared his views on the potential impact of Ethereum Spot ETFs on the ETH price.
In his analysis, he provides a detailed scenario of what we can expect when ETH Spot ETFs begin trading.
Predicting potential inflows into Ethereum ETFs is complicated. Koenig decided to rely on estimates from various experts to obtain a range of expected values. Here's what he found:
- Goldman Sachs expects the new spot ETH ETFs to attract modest net inflows of $1 billion to $3 billion over the remainder of the year.
- Bloomberg Senior ETF Analyst Eric Balchunas thinks Ethereum could capture around 15-20% of the inflows seen in Bitcoin ETFs.
- Bitwise CIO Matt Hougan thinks ETH ETFs could see net inflows of 25% to 50% of Bitcoin ETFs in the first four months of trading.
- Grayscale's research team expects spot ETH ETFs to see approximately 25%-30% of the demand of Bitcoin ETFs.
Based on these estimates, Koenig derived a bear, bottom and bull forecast for potential inflow into the ETH ETF by the end of 2024.
The real question is: How can we predict the impact of these potential inflows into Ethereum on the price? Koenig suggests making some assumptions based on the recent spot Bitcoin ETF. It assumes that roughly 75% of Bitcoin's recent price movement can be explained by ETF net inflows alone. This means that net inflows of ~$13.86 billion moved Bitcoin by approximately +37.5%. In other words, each billion in net inflows into ETFs is assumed to move Bitcoin by +2.7%.
However, Bitcoin and ETH are different from each other. Koenig also took other factors into account to estimate how much Ethereum could move for every billion dollars in net inflows:
- The fully diluted value of Bitcoin is currently ~3.15x that of Ethereum.
- Approximately 27% of all Ethereum is staked.
- Ethereum's supply has generally followed a deflationary (-0.184%) trend since the Merge.
Based on this, Koenig assumes that Ethereum is 4 times more reactive than Bitcoin, meaning that for the same entry, Ethereum will move four times more than Bitcoin. This means that every billion dollars in net inflows could move Ethereum by +10.8%.
Considering all this, Koenig made different predictions about the price performance of Ethereum by the end of 2024:
“Bear scenario: ETH is at $4,428 at the end of the year.
Base case scenario: ETH is at $5,294 at the end of the year.
Bullish scenario: ETH will reach $6,730 by the end of the year.”
*This is not investment advice.