Analysts have warned that an Ethereum Exchange-Traded Fund (ETF) might not experience the same level of success as Bitcoin ETFs. The recent green light given to spot Bitcoin ETFs in January significantly boosted the value of the primary cryptocurrency. Despite a shifting stance on the potential approval of an Ether ETF, Standard Chartered remains bullish on the broader digital asset market.
Amidst a series of challenges affecting the cryptocurrency space in recent weeks, the investment bank foresees a turnaround and believes the market is poised for a recovery. Geoff Kendrick, an analyst at Standard Chartered, noted that the momentum of Bitcoin ETF inflows has slowed down, raising doubts about the likelihood of Ether ETF approvals in May.
Standard Chartered highlighted that the Securities and Exchange Commission (SEC) has taken aim at the decentralized finance (DeFi) sector by initiating legal action against Uniswap. Additionally, spikes in US Treasury yields and delays in Federal Reserve interest rate adjustments have exerted downward pressure on high-risk assets like Bitcoin (BTC) and Ethereum (ETH), further exacerbated by escalating tensions in the Middle East.
Nonetheless, Standard Chartered maintains a cautiously positive outlook on the future of the digital asset market, indicating that current negative developments have already been priced into Bitcoin and Ethereum. The bank foresees a resurgence driven by “positive structural drivers” and has reiterated its year-end price forecasts of \(150,000 for Bitcoin and \)8,000 for Ethereum.
The report also noted a significant shift in market dynamics, with a substantial $261 million reduction in leveraged long positions in the Bitcoin futures market on April 13, largely in response to geopolitical uncertainties in the Middle East. This marked the most extensive daily liquidation since October 2023. Moreover, the bank suggested that the influx of investments in Bitcoin spot ETFs has likely slowed down due to macroeconomic factors such as rising US Treasury yields and ongoing geopolitical tensions.
Furthermore, the bank indicated that the initial wave of ETF acquisitions may be approaching a saturation point, signaling a temporary pause in a critical market catalyst. Looking ahead, the integration of these ETFs into broader macro funds is expected to unfold gradually.
Based on the most recent data available, Grayscale’s GBTC holds the largest share of U.S. Bitcoin ETF assets, with 302,663 BTC, equivalent to 1.441 percent of the total Bitcoin supply. The iShares Bitcoin Trust managed by BlackRock closely follows with 274,462 BTC, representing 1.30 percent of the total supply. Additionally, the Fidelity Wise Origin Bitcoin Fund (FBTC) holds 153,995 BTC, accounting for 0.733 percent of the 21 million BTC in circulation.
Shankar is the founder of yMedia. He ventured into the cryptocurrency space in 2013 and is a strong supporter of Ethereum.
Twitter: @bhardwajshash
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