Source: Jin10 Data

Standard Chartered Bank predicts that Ethereum will reach $8,000 by the end of the year, meaning a potential increase of over 130%.

The Ether ETF for spot trading is set to debut, which is expected to bring another major victory to the cryptocurrency industry at this historic moment.

Wall Street has different predictions on how Ethereum will change after the ETF is listed. According to foreign media reports, five Ethereum spot ETFs, including Fidelity, will be listed on Cboe on July 23.

Even before the US Securities and Exchange Commission (SEC) approved these Ethereum spot ETFs in May, the optimistic sentiment surrounding their creation had already sparked bullish expectations for Ethereum.

Since March, Standard Chartered Bank has predicted that Ethereum will reach $8,000 by the end of the year. The bank expects these funds to drive inflows of $15 billion to $45 billion into the Ethereum market within 12 months. As of last Friday, the Ethereum trading price was slightly below $3,500, which means a potential increase of over 130%.

Bulls gained confidence from the performance of Bitcoin spot ETFs after their launch. With funds pouring into these ETFs at the beginning of 2024, Bitcoin climbed more than 73% and reached a historic high of $73,780 in March. However, Wall Street opinions on whether Ethereum can replicate this momentum are divided.

Nikolaos Panigirtzoglou of JPMorgan pointed out at the end of May that Ethereum spot ETFs may only attract a small amount of capital inflows.

Citibank made a similar prediction this month, expecting that capital inflows into Ethereum spot ETFs will only account for 30%-35% of capital inflows into Bitcoin spot ETFs. This translates to a flow of $4.7 billion to $5.4 billion into Ethereum spot ETFs in the next six months.

Both banks provided some of the same reasons. They pointed out the first-mover advantage of Bitcoin spot ETFs and emphasized that the functions provided by Ethereum will not be obtained through ETFs, thereby limiting demand. For example, ETF investors will not be able to access Ethereum staking, which is a function of locking in tokens for returns.

However, others believe that these predictions are too pessimistic. Steno Research predicted at the end of June that Ethereum will reach $6,500 this year under strong capital inflows.

Steno Research analysts said,"The market's view of the upcoming Ethereum spot ETF is too pessimistic. We expect net inflows to reach $15 billion to $20 billion in the first year, because Ethereum has the characteristics that attract Wall Street." The company said,"This should significantly boost its value, not only in dollar terms, but also in bitcoin terms."

Insiders also pointed out that compared with Bitcoin, Ethereum's liquidity is more restricted, partly due to revenue restrictions. According to Galaxy Digital, this makes Ethereum more sensitive to price fluctuations. In other words, even if the inflow is not as large as that of Bitcoin spot ETFs, Ethereum may still achieve significant returns.

QCP Capital said in mid-June:"Although there is uncertainty around the popularity of Ethereum spot ETFs, catching 10-20% of the capital inflows of Bitcoin spot ETFs may push Ethereum to break through $4,000, close to its peak of $4,800."

SynFutures CEO Rachel Lin predicted that supply considerations are one of the main reasons Ethereum may soar to $22,500 in this cycle. In a report in May, she outlined how Ethereum's supply has remained at 0.12 billion since 2022, while Bitcoin's supply has continued to grow.

However, some people said that regardless of the impact of net capital inflows and supply on Ethereum's price in the coming months, the direct impact of Ethereum spot ETFs may disappoint investors.

FxPro senior market analyst Alex Kuptsikevich said:"In the first few days, price fluctuations will be limited as funds will slowly move from cryptocurrencies to ETFs, rather than pouring in quickly."

He added:"But from a broader perspective, this is the second cryptocurrency that can be easily added to investor portfolios. In the first few months after the launch of Ethereum spot ETFs, the relative weight of Ethereum in traders' portfolios may increase."

Editor/Feynman