Ethereum

Bitcoin

Spot

Spot Ether (ETH) exchange-traded funds (ETFs) won’t see the same day-one inflow as <a href="https://cointelegraph.com/learn/bitcoin-etfs-a-beginners-guide-to-exchange-traded-funds">spot Bitcoin ETFs</a> did, as the asset’s use cases are far more difficult to value, an industry executive warns.
The spot Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) ETFs saw $655.2 million of inflows on the opening day of trading on Jan. 11, exceeding industry expectations at the time.
While Bitcoin offers a steady store of value use case, the metrics used to value Ethereum’s technology-driven investment use cases are far less clear, Stephen Richardson, managing director of financial markets at Fireblocks, told Cointelegraph.
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 “What’s missing is widespread consensus that effectively evaluates the utility or utilization rate of the Ethereum blockchain.”&nbsp;
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“The right value metrics and drivers need to first be created to be able to assess the adoption or utilization of the technology to then derive its value,”&nbsp;Richardson added.
As a result, “we’re likely not going to see the same levels of inflows on day one with the Ether ETFs as we saw with the Bitcoin ETFs,” he concluded.
Bitwise’s BITB product saw the most inflows on the first day spot Bitcoin ETFs launched at $237.9 million, followed by Fidelity’s FBTC ($227 million) and BlackRock’s IBIT ($111.7 million), BitMEX Research data shows.
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 <img src="https://s3.cointelegraph.com/uploads/2024-06/8ae06283-e71e-4b82-8f22-14080aad96b5.png" alt="" title="">
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 Flows for spot Bitcoin ETFs from Jan. 11 to March 9. Source: BitMEX Research. 
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Discussing how one would evaluate Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>), Richardson suggested looking at total value locked, which is a metric that can already be used to value Ethereum and layer-2 blockchains on top of it. However, Richardson hinted that he would like to see more.
VanEck, one of the recently approved spot Ether ETF applicants, recently <a href="https://www.vaneck.com/es/en/blog/digital-assets/a-potential-valuation-methodology-for-ethereum/" target="_blank" rel="noopener nofollow">suggested</a> that transaction volume, the number of users and validators could be used to assess Ethereum adoption and utilization.
Asked what the strongest one-liner is to convince potential investors on the spot Ether ETFs, Richardson said Ethereum is the “best bet” to dominate the digital native space and bridge more retail and institutional investors on-chain. 
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 “Ethereum’s value is intrinsically linked to the use cases that are being built on top of it, so investors are making a bet on the utilization of the software itself.”
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Last week, Markus Thielen, head of research at 10x Research, suggested Ethereum <a href="https://cointelegraph.com/news/ethereum-etfs-3-pitches-that-could-convince-wall-street-investors">could be pitched</a> as a “network empowering the future of finance” 
However, Thielen said the revenue Ethereum is producing is “minuscule” relative to its $455-billion market capitalization, which doesn’t mean it is a “viable, sufficiently cash-flow-producing investment.”
Ethereum’s staking yields are also inferior to United States Treasury yields, Thielen added.
Related:&nbsp;<a href="https://cointelegraph.com/news/sec-etf-decision-means-ether-other-tokens-not-securities">SEC’s ETF decision means ETH and ’a lot’ of other tokens are not securities</a>
On May 23, the U.S. Securities and Exchange Commission approved 19b-4 applications from VanEck, BlackRock, Fidelity, Grayscale, Bitwise, Franklin Templeton, ARK 21Shares and Invesco Galaxy to issue spot Ether ETFs.
Those approved must wait until the SEC signs off their Form S-1 filings for <a href="https://cointelegraph.com/learn/different-types-of-etfs">the ETFs to start trading</a>.
If that happens, Bloomberg ETF analysts Eric Balchunas and James Seyffart expect the ETFs to capture somewhere <a href="https://cointelegraph.com/news/ether-etf-launch-next-month-certainly-possible-analysts-say">between 10% and 20% of the flows</a> that the spot Bitcoin ETFs have seen.
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 <img src="https://s3.cointelegraph.com/uploads/2024-06/8e529b8e-c408-4403-8faa-812565f68546.png" alt="" title="">
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 Source: <a href="https://x.com/EricBalchunas/status/1795777989369561135" target="_blank" rel="noopener nofollow">Eric Balchunas</a>
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According to Farside Investors, spot Bitcoin ETFs have&nbsp;<a href="https://farside.co.uk/?p=997" target="_blank" rel="noopener nofollow">tallied</a> $13.8 billion in net inflow since the products launched roughly four and a half months ago.
Capturing 15% of that would still see spot Ether ETFs tally a combined $2.07 billion over the same timeframe, which is still impressive by industry standards.
Magazine:&nbsp;<a href="https://cointelegraph.com/magazine/godzilla-vs-kong-can-sec-prevail-against-crypto-legal-firepower/">Godzilla vs. Kong: SEC faces fierce battle against crypto’s legal firepower</a>

Why Ethereum ETF day one inflow won’t be like Bitcoin — Fireblocks MD

Cointelegraph

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