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How Ethereum ETF Inflows Will Affect Bitcoin and Cryptocurrency Prices
Benzinga has studied the impact of Spot ETF on Ethereum ON Bitcoin (CRYPTO: Bitcoin) AND Ethereum (CRYPTO: ET) prices and the potential size of inflows to provide investors with a better understanding of future market dynamics.
Expected inflows and market dynamics
The approval of Ethereum spot ETFs has already started to positively change investor sentiment.
Data indicates that Ethereum saw a turnaround with net inflows following the SEC approval, breaking a 10-week streak of outflows totaling $200 million.
Inflows for Ethereum recently reached around $36 million, underscoring renewed investor interest.
Will it be a new capital?
The influx of capital into Ethereum ETFs is expected to attract both retail and institutional investors, providing a regulated and safe means of investing in Ethereum.
Analysts expect a significant inflow of new capital into these ETFs.
For example, Bloomberg Intelligence forecasts that new Hong Kong crypto products, including Ethereum ETFs, could see around $1 billion in net inflows in their first year or two.
Given the larger scale of the US ETF market, inflows for US-based Ethereum ETFs could be substantially higher.
Read also: Bitcoin Spot ETFs saw an inflow of $887 million on Wednesday, the second highest ever
Potential impact on Bitcoin
There is concern that new capital flowing into Ethereum ETFs could cannibalize inflows that would otherwise go into Bitcoin ETFs.
However, the data suggests a more nuanced picture.
Bitcoin ETFs have done this too view strong inflows, with similar products iShares Bitcoin Trust by BlackRock (NASDAQ:IBIT) leading the way with $720 million in net inflows recently.
This indicates strong investor appetite for both cryptocurrencies.
Pricing implications
The impact on prices will depend on the balance between new capital inflows and the potential shift from Bitcoin to Ethereum investments.
If the inflows were primarily new capital, we could see upward pressure on both Bitcoin and Ethereum prices.
Conversely, if significant cannibalization occurs, Bitcoin could experience slower price appreciation than Ethereum.
The upcoming Benzinga The future of digital assets The November 19 event will be a key forum to discuss these developments.
Industry leaders will offer their insights into the evolving dynamics of digital assets, providing valuable perspectives on how these ETF inflows could shape the market in the coming months.
Read next: Mike Novogratz Predicts Bitcoin to Reach $100,000 by the End of 2024
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