Andrew Kang, founder and partner of cryptocurrency venture capital firm Mechanism Capital, believes that the impact of an Ethereum spot ETF on the price of Ether (ETH) will not be as significant as that of a Bitcoin spot ETF. He predicts that before the launch of an Ethereum ETF, the trading price of ETH will be between $3,000 and $3,800, and after the ETF is launched, Ether may drop to between $2,400 and $3,000.
In an article published on Sunday, Kang stated that unlike Bitcoin, Ethereum attracts less institutional interest, resulting in less motivation to convert Ethereum spot into an ETF. Additionally, network liquidity is not ideal. Kang wrote:
Andrew Kang believes that the inflow of funds attracted by an Ethereum spot ETF will be 15% of the inflow seen by a Bitcoin spot ETF, which is not far off from Bloomberg ETF analysts Eric Balchunas and James Seyffart’s estimate of 10% to 20%.
Kang pointed out that within the first six months after the launch of a Bitcoin spot ETF, only $5 billion of new capital (excluding funds converted from spot) flowed in. If this data is applied to Ethereum, an Ethereum spot ETF could potentially see a “real” capital inflow of $840 million within the same time frame.
Furthermore, Kang predicts that the price of ETH against BTC will continue to decline and remain within the range of 0.035 to 0.06 over the next year. He wrote:
According to TradingView data, the price of ETH against BTC has been consistently declining since September 2022 and hit a new low in May of this year. Recently, there have been signs of a bottom forming for ETH/BTC, but whether it can break the downward trend remains to be seen.
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ETH/BTC price trend over the past three years (Source: TradingView)
