Markets
Fundstrat exec says sentiment around Ethereum ETF is ‘very bearish’
Although Ethereum has outperformed Bitcoin in returns since the start of the year, investors still seem bearish on its ETF.
When trading spot Ethereum exchange-traded funds (ETFs) has not yet started, Bloomberg reports that investors are already showing “bearish” sentiment toward the second-largest cryptocurrency, citing Fundstrat head of digital asset strategy Sean Farrell.
In a note, Farrell highlighted that despite the negative sentiment, hedge funds could still provide a significant boost to these ETFs by capitalizing on basis trading opportunities — the discrepancies between the spot and futures markets. Fundstrat Global and Galaxy Digital project that Ethereum spot ETFs could attract $5 billion in net inflows in the first five months, although Galaxy Digital warns that a lack of participation in the ETFs could impact demand.
Despite the bearish outlook, the approval of spot Ethereum ETFs could represent a key milestone for the cryptocurrency industry at large, as VanEck recently flagged its intention to launch another spot ETF, this time for Solana.
ETF Possibility Score | Source: GSR Markets
Analysts at GSR Markets, one of the oldest crypto market makers, project that the introduction of Ethereum spot ETFs could pave the way for more top 100 cryptocurrencies to enter traditional markets. Based on decentralization and demand, GSR Markets predicts that once Solana receives approval for its ETF, investment firms will likely file for spot ETFs for NEAR Protocol (NEAR), Avalanche (AVAX), Aptos (APT) and others.
However, the timeline for the U.S. Securities and Exchange Commission (SEC) to approve these filings has not yet been set. Reuters, citing its own sources, reports that the SEC could approve spot Ethereum ETFs as early as July 4th. Meanwhile, Bloomberg senior ETF analyst Eric Balchunas indicated that Solana ETFs are unlikely to be approved before 2025.
Since the start of the year, Ethereum’s price has risen by approximately 51%, outpacing Bitcoin by 6% and Solana by 13%, according to data from MarketWatch.