Ethereum spot ETF set to debut soon! Wintermute, Kaiko bearish: Inflow demand far below expectations

With the imminent launch of Ethereum spot ETF, market makers Wintermute and research firm Kaiko have both predicted that the initial demand for these ETFs may be lower than expected. They agree that the inflow of funds within a year may even fall far short of the inflow volume of Bitcoin spot ETF in six months.

Kaiko: Traders' Confidence in Ethereum ETF is Weakening

Kaiko's Head of Indices, Will Cai, stated in a research report yesterday, October 22, that the demand for Ethereum futures ETF launched in the United States at the end of last year is low, as most traders are focusing on the launch of spot ETFs in hopes of quickly accumulating assets.

Although the full demand may take several months to fully materialize, the price of ETH may be quite "sensitive" to fund inflows in the initial days of trading, showing high volatility.

Meanwhile, the implied volatility of ETH surged over the weekend, with the volatility of the contracts expiring on July 26th rising from 59% to 67%:

This indicates that traders lack confidence in the listing of Ethereum spot ETFs, as they are willing to allocate more additional funds to hedge their bets.

Wintermute: ETH Price Expected to Increase by at Most 24% in a Year

Cryptocurrency market maker Wintermute, like Kaiko, is also not optimistic about the demand performance of Ethereum spot ETFs, expressing a similar view in their market report on Monday.

The company expects that Ethereum spot ETFs will generate approximately $32 billion to $40 billion in inflows in the first year of trading:

We believe that the demand for Ethereum spot ETFs may be much lower than expected, with this figure only representing 38% of the inflow volume of Bitcoin spot ETFs within six months.

They also added, "The total inflow for Bitcoin spot ETFs by the end of this year is expected to reach around $32 billion in assets; in other words, the inflow in the first year of Ethereum spot ETFs will only be 10% to 12% of Bitcoin's."

Furthermore, Wintermute also made a prediction on ETH price, stating that its increase over the next 12 months will not exceed 24% and summarized the reasons:

The U.S. regulatory agency rejected the issuer's request to pledge their Ethereum spot ETF for profit, reducing its competitiveness compared to buying the ETF and holding ETH directly.

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Ethereum Spot ETF to Start Trading Tonight

Prior to this, a total of 7 Ethereum spot ETFs received final approval from the U.S. Securities and Exchange Commission (SEC) on Monday night, with issuers including BlackRock, Fidelity, Franklin Templeton, VanEck, Bitwise, 21Shares, and WisdomTree.

Most of the issuers have management fees ranging from 0.15% to 0.25%.

Ethereum spot ETF officially listed on 7/23! Will ETH see a "sell the news" market trend?