Analysts at a global asset management company, Bernstein expressed bearish sentiment on the prospects of Spot Ethereum ETFs. According to Bernstein analysts Gautam Chhugani and Mahika Sapra, Ethereum ETF Spot may see less demand than Spot Bitcoin ETFs due to the lack of staking functionality.

Analysts predict feeble demand for Spot Ethereum ETFs

In a novel report published on Monday titled Bernstein Analysts suggested that spot Ethereum ETFs will likely experience a decline in investor demand once launched. Analysts painted bear image for the recently approved investment asset, noting that enthusiasm for Ethereum Spot ETFs may be on a smaller scale than initial excitement about Spot Bitcoin ETFs.

Chhugani and Sapra attributed their despondent forecasts to the so-called no ETH staking function in Spot Ethereum ETF filings. However, they wrote that the “trading fundamentals” of Spot Ethereum ETFs could likely improve over time, attracting more investors and ultimately improving liquidity.

The analysts also wrote that the basis of the trade will be a unique strategy in which investors buy Spot Ethereum ETFs and sell futures contracts waiting for price unification. This approach would potentially provide the ETF market with sufficient liquidity and sustainability.

Given Bernstein’s bearish outlook for Ethereum Spot ETFs, the potential decline in investor demand could lead to a significant one reduced revenues. This result would be in stark contrast to mighty tributaries observed after the launch of Spot Bitcoin ETFs.

After the US Securities and Exchange Commission (SEC) Approved Spot Bitcoin ETFs On January 10 and launched a day later, millions of inflows flooded the market within days, fueled by investor demand and prior expectations for digital assets. These huge inflows also contributed to the enhance in Bitcoin’s value novel all-time highs above $73,000.

Bloomberg analyst reinforces Ethereum ETF launch date

Spot Ethereum ETFs will likely hit the market in July 2024. According to Bloomberg senior analyst Eric Balchunas, an asset management firm VanEck filed Form 8-A for the Spot Ethereum ETF. Analyst revealed on X (formerly Twitter) post that approximately seven days after VanEck completed the same form for the Spot Bitcoin ETFs, the ETFs went live.

Incredibly, July 2, about seven days later VanEck’s last 8-A filing was the Balchunas date anticipated for the launch of Spot Ethereum ETFs. The Bloomberg analyst doubled his previous forecast, indicating that Ethereum Spot ETFs may debut on that day.

In response to his post, a member of the cryptocurrency community asked about the inclusion of staking in the Ethereum Spot ETF feature. Balchunas responded “no,” pointing to the SEC’s concerns about classifying betting as an investment unregistered security. The community member further noted that the lack of staking will make Ethereum Spot ETFs much less attractive than their Bitcoin versions.

Featured image created with Dall.E, chart from Tradingview.com