Steno Research Predicts $20B Net Inflows for Ether ETFs in First Year

UTC by Anisha Pandey · 3 min read
Steno Research Predicts $20B Net Inflows for Ether ETFs in First Year
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The report suggests that the ETH/BTC ratio could strengthen to 0.065 later this year if these optimistic projections hold true.

Analysts at Steno Research believe that the crypto market is clouded by an air of unwarranted pessimism about the upcoming launch of spot Ether (ETH) exchange-traded funds (ETFs) in the US. Despite the naysayers, their recent report paints a promising picture, stating that ether’s special appeal to Wall Street may lead to net inflows of $20 billion in the first year.

Steno Research’s senior analyst Mads Eberhardt expressed confidence in the market’s potential. “We continue to forecast a net inflow between $15 billion and $20 billion in the first 12 months, even considering the outflow from the Grayscale Ethereum Trust (ETHE), [which has $10 billion in assets under management (AUM)],” Eberhardt noted.

Such large inflows would push ether’s value higher, both in dollar terms and relative to Bitcoin (BTC). Steno Research boldly predicts that ETH could soar to over $6,500 later this year. The second-largest cryptocurrency is currently trading at around $3,400, down by around 30% from its all-time high of $4,891.70.

Moreover, the report suggests that the ETH/BTC ratio could strengthen to 0.065 later this year if these optimistic projections hold true. Interestingly, earlier this month, Bitfinex’s head of derivatives Jag Kooner stated that the newly-launched Ether ETFs would suck out up to 20% of the bitcoin ETF flows.

Steno’s outlook is more bullish than others in the industry. For instance, a recent report by asset Manager Bitwise offered a slightly more conservative estimate, predicting $15 billion of net inflows in the first 18 months. On the other hand, Galaxy Research estimated that spot ether ETFs could see $5 billion of net inflows in the first five months.

Optimism All Around

The enthusiasm around spot ether ETFs is palpable as they inch closer to trading in the US, following the Securities and Exchange Commission’s (SEC) approval of 19b-4 filings from issuers last month. Once the S-1 filings get the green light, these new financial products could start trading as soon as early July, according to industry leaders.

James Seyffart, the renowned ETF analyst at Bloomberg, predicts that these new products can see daylight in early July. Meanwhile, the SEC Chair Gary Gensler stated earlier this week that the approval process for the Ether ETFs is going “smoothly.”

Adding fuel to the bullish fire, President Biden has recently shown newfound support for the crypto industry. Last month, the US House passed the Financial Innovation and Technology for the 21st Century Act, or FIT21 bill, with significant bipartisan support.

Steno’s May report had already hinted at this optimistic outlook, stating that “it is now a question of ‘when’ not ‘if’ the Ethereum ETFs will start trading”.

Funds & ETFs, Market News, News
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