U.S. Spot Ethereum ETFs May See Modest Inflows Compared to Bitcoin, Citi Reports

US Spot Ethereum ETFs Could See Modest Inflows Relative to Bitcoin, Citi Report Says

Spot Ethereum (ETH) exchange-traded funds (ETFs) in the U.S. may experience net inflows of only 30%-35% of the levels seen in spot Bitcoin (BTC) ETFs, according to a Citi research report. This projection translates to a net inflow range of $4.7 billion to $5.4 billion over a six-month period. Citi analysts noted that these figures may be overstated, as both inflows and ether’s return beta relative to such flows may be lower than expected.

Spot Ethereum ETFs are set to begin trading in the U.S. next week after receiving approval from the Securities and Exchange Commission (SEC) earlier this year. However, Citi analysts argue that while Ethereum offers potential long-term diversification benefits due to its broader use cases, these benefits have yet to be fully realized.

Citi also highlighted that the lack of staking options in Ethereum spot ETFs could contribute to lower-than-expected inflows. Moreover, Bitcoin’s first-mover advantage drove billions of inflows and strong performance ahead of Ethereum’s ETF approval in May.

Despite these cautious estimates, Citi’s report noted that the timing of the launch of spot Ethereum ETFs coincides with an increasingly moderate stance from the Federal Reserve, which could signal lower interest rates, a stronger stock market, and a weaker U.S. dollar. Such a macroeconomic environment could be beneficial for the broader crypto market.