ETH is undervalued. Ethereum spot ETF approved, should "buy the news"!
Since the Bitcoin spot ETF launched in the United States, a total of $31 billion has flowed in, during which time ETH/BTC has dropped by nearly 25%. Now, Ethereum has created a fair competitive environment with its own ETF. Joseph Ayoub, who was previously in charge of crypto research at Citigroup, believes that ETH is severely undervalued and it is now time to "buy the news"! Source
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Development Trajectory of Bitcoin Spot ETF
After leaving Citigroup, Joseph Ayoub founded Rug AI, focusing on the development of AI and cryptocurrency.
He pointed out that BTC surged 30% previously due to approval rumors, and further increased by 40% before officially trading on 1/11. The inflow of Bitcoin spot ETF exceeded $31 billion within 2 months, and BTC rose by over 90%. From the bottom to the peak, Bitcoin rose by a total of 170%.
This is the first credible sign of institutional adoption. Funds flowed in from over 500 holders including hedge funds, advisory firms, and asset management companies.
Over 400 13F reports hold BlackRock IBIT, and Morgan Stanley holds nearly 270 million GBTC.
What Sets ETH Apart from BTC?
If an Ethereum ETF could capture a small portion of the flow seen by the Bitcoin ETF, it would lead to a significant increase in ETH price.
Ayoub Refutes Critics of ETH
What sets ETH apart from BTC? Critics of ETH argue that BTC is the king of crypto assets and cannot be compared with ETH. Arguments for selling ETH include:
- Difficulty in understanding, with older generations unfamiliar with "Ethereum," and ETH ETF lacking traditional market appeal?
- Outflow of funds from Grayscale's ETHE
- Institutions not knowing what ETH is
Ayoub refutes these points, believing that ETH is more attractive than BTC!
- ETH is decentralized computing
- Outflow of ETHE is similar to that of GBTC
- Institutions prefer Ethereum
Key Figures in Institutions Bullish on ETH
He cites several key figures mentioning Ethereum:
Ken Griffin, CEO of Citadel: ETH will replace Bitcoin
- Carl Icahn, American business tycoon: ETH is a store of value and payment system
Stanley Druckenmiller, American billionaire and former hedge fund manager: ETH may ultimately surpass BTC
Jamie Dimon, CEO of JPMorgan: ETH has use cases. He has mentioned his dislike for BTC numerous times, not seeing the utility of Bitcoin
Larry Fink, CEO of BlackRock: ETH is about tokenization
BlackRock CEO Larry Fink is bullish on an Ethereum ETF: Heading towards a tokenized future
ETH Potentially More Popular than BTC
In addition, Ayoub presents reasons why ETH may be more popular than BTC:
- ETH has a tighter supply contraction than BTC
- ETH has native revenue, and Tradfi likes revenue
- ETH only requires 0.01% of the energy to run, meeting ESG requirements
- ETH has utility and embedded applications that create value
Issuers to Drive ETF, ETH Price Still Undervalued
Furthermore, major issuers like BlackRock and Fidelity have seen record revenues from Bitcoin spot ETFs. BlackRock's IBIT holds $16.3 billion in BTC assets under management with a 0.3% fee, bringing in $48.9 million in annual revenue. This accounts for 1% of their revenue and 3.2% of net income.
Ayoub believes that issuers will strive to promote the flourishing of Ethereum ETFs.
Assuming that ETH demand is proportional to its market cap and roughly equivalent to BTC, one can expect a significant rise in ETH price. Furthermore, as Ethereum ETFs have yet to commence trading, this also provides room for speculation.
Ayoub believes that with the support of inflows, the ETH/BTC ratio could potentially return to above 0.06, even reaching 0.08.
This article reflects personal opinions and is not investment advice. Please DYOR.