en.cryptonomist.ch
From the analysis of Andrew Kang, founder of Mechanism Capital, it emerges that after the launch of spot Ethereum ETFs, the price of ETH could drop to $2,400. For Kang, the smart contract crypto does not attract institutional investors in the style of Bitcoin.
Summary
ETF on Ethereum Spot: after the launch, the price of ETH could drop to $2,400
According to the analysis by Andrew Kang, founder of the venture capital firm Mechanism Capital, it seems that after the launch of spot Ethereum ETFs, the price of ETH could drop to as low as $2,400.
“Before the launch of the ETF, I expect ETH to trade between 3,000 and 3,800 dollars. After the launch of the ETF, my expectations are 2,400-3,000 dollars.”
In practice, Kang wanted to highlight that the position of Ethereum compared to Bitcoin is very different.
In fact, the founder of Mechanism Capital states that the crypto of smart contracts does not attract institutional investors, as Bitcoin did previously. On the contrary, for Kang, there are few incentives to convert Ether spot into ETF form and the network’s cash flows have not been very impressive.
Not only that, it seems that according to Kang the success of the Bitcoin spot ETF has become an expectation for the Ethereum ETF for crypto natives, and not for TradFi investors.
“Personally, I believe that the expectations of crypto natives are inflated and disconnected from the real preferences of traditional tradfi allocators. It is natural that those within the crypto space have a relatively high mental and purchasing share of Ethereum. In reality, Ethereum is much less appreciated as a key portfolio allocation by many large non-crypto capital groups.”
Spot Ethereum ETF: the forecast on the price of ETH after the launch
At the time of writing, ETH is worth $3,377. If after the launch of spot Ethereum ETFs, the price were to follow Kang’s predictions and drop to $2,400, it would be a dump of -30%.
Not only that, the founder of Mechanism Capital believes that spot Ethereum ETFs will attract 15% of the flows that spot Bitcoin ETFs have recorded, which is a percentage between 10 and 20% estimated by Bloomberg analysts Eric Balchunas and James Seyffart.
Other analyses then, talk about the ETH/BTC price ratio, which from 0.054 at current prices, could drop to 0.035 in the next 12 months.
However, Kang believes that a rally in the price of Bitcoin towards $100,000 in the next six to nine months could “drag” Ether towards a new all-time high.
The addition of the ProShares request
Among the latest news on ETF su Ethereum spot, there is talk of the United States Securities and Exchange Commission (SEC) that has added the request from ProShares.
And in fact, among the 8 questions already approved in May, it seems that the one from ProShares was missing. Now, given that the process for final approval could end between the end of June and the beginning of July, this ninth question has also been accepted.
The announcement was made directly by the SEC, with a document revealing that NYSE Arca has proposed a rule change to list and trade shares of the ProShares ETF on Ethereum
Now the crypto world and institutional investors are waiting to see the final approval of the 9 Ethereum spot ETFs, with the SEC expected to approve the S-1 form.