- An Ethereum ETF could be launched at any time.
- ETF analysts at Bloomberg Intelligence predict that demand for an Ethereum ETF will be only around 20% of that of a Bitcoin ETF.
- Bitwise Chief Information Officer Matt Hogan argued that marketing Ethereum as a technology could lead to the product exceeding expectations.
A spot Ethereum exchange-traded fund is expected to launch soon.
Matt Hogan, chief investment officer at crypto index fund Bitwise, argued in a report on Monday that these ETFs could significantly outperform expectations.
Hogan said the key is to market Ethereum as a big technology.
“Investors love technology stocks,” he said. “Almost every investor is in high-growth technology stocks like Nvidia and Meta, but relatively few are in financial assets like gold.”
Marketing Ethereum in Two Words
Bitcoin was created with a supply cap, meaning the number of coins in existence will never exceed 21 million.
As such, leading cryptocurrencies are often referred to as “digital gold” and have been touted as a potential hedge against currency depreciation.
But marketing Ethereum is not that easy.
“One of the challenges for an Ethereum ETF to penetrate the 60/40 Baby Boomer generation is distilling its purpose/values into an easily understandable tagline like 'Bitcoin is digital gold,'” Eric Balchunas, ETF analyst at Bloomberg Intelligence, said in May.
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After all, it’s almost difficult for an outsider to understand what Ethereum actually does by simply calling it a “decentralized, open-source, distributed computing platform that enables the creation of smart contracts and decentralized applications (also known as dApps).”
For these reasons, and due to the lackluster performance of Ethereum futures ETFs, Balchunas expects demand for a physical Ethereum ETF to be only 15-20% of that of a Bitcoin ETF.
The Bitcoin ETF has attracted roughly $14.6 billion since its launch in January.
Technology Play
But if financial advisors market the product as a tech investment, an Ethereum ETF could “see greater upside than expected,” Hogan said.
That would mean completely separating Ethereum from Bitcoin in the minds of investors, and making it clear that while Bitcoin competes with gold, Ethereum remains at the center of technological development.
“It's easy to imagine investors selling off some of their tech stocks and adding Ethereum,” Hogan said.
“It's easier than imagining investors carving out an entirely separate portfolio space for new financial assets, they argue. [like Bitcoin,]” he added.
Hogan is not the only one arguing for an Ethereum ETF to be marketed in this way.
Quinn Thompson, founder of crypto hedge fund Recker Capital, said on X that an Ethereum ETF would serve as a proxy investment vehicle for those looking to invest in all things blockchain-related.
This includes tokenization, smart contracts, DeFi, stablecoins, and NFTs.
“Remember the old phrase, 'I believe in blockchain, but I don't know much about bitcoin?' Now that expression is understandable to traditional investors,” Thompson said.
Tom Carreras is DL News' Market Correspondent. Have a tip for an Ethereum ETF? Contact him at tcarreras@dlnews.com.
