Bitwise CIO Predicts Ethereum ETFs to Push Ether Above $5,000

Spot Ethereum ETFs could have a bigger impact on ether’s price than similar products had on bitcoin, pushing ether above $5,000 by year-end according to Bitwise CIO Matt Hougan.

Matt Hougan, Chief Investment Officer at Bitwise, predicts spot Ethereum ETF inflows will significantly impact ether’s price, potentially exceeding $5,000 by the end of 2024. While the initial launch might experience volatility, Hougan expects new highs for ether due to several factors.

Spot ETFs, unlike traditional futures-based products, directly hold the underlying asset. This creates new buying pressure, as seen with Bitcoin ETFs launched in January 2024. Hougan points to Bitwise’s Bitcoin ETF (BITB) purchasing over double the amount of bitcoin mined since its launch.

Ethereum’s lower inflation rate compared to Bitcoin (0% vs 1.7%) at the time of Bitcoin ETF launch means less buying pressure is needed to maintain its price. Additionally, Ethereum’s proof-of-stake mechanism reduces forced selling from miners, unlike Bitcoin’s proof-of-work model.

Staking and DeFi smart contracts lock up a significant portion of ether’s supply (around 40%), making it less available for sale and potentially driving the price up.

Hougan predicts strong inflows into Ethereum ETFs, exceeding the pace observed with Bitcoin ETFs. This, combined with Ethereum’s specific characteristics, could push the price well above its current level and challenge its all-time high.

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* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.