JPMorgan recommends keeping expectations low for the performance of Ethereum ETFs – DiarioBitcoin

The bank’s analysts rule out that ETFs Ethereum move the same amount of capital as funds based on Bitcoin, since there are a series of factors that pose significant differences between both products.

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• The analysts of JPMorgan suggest moderating expectations regarding the performance of ETFs Ethereum
• They anticipate that these will capitalize lower income than funds based on Bitcoin
• They believe that there are important aspects that investors waiting for this product should take into account.
• The reading comes amid the wait for the arrival of ETFs Ethereum to the US market

While expectations surrounding the arrival of ETFs Ethereum spot to the US market is quite high, analysts at JPMorgan They advise enthusiasts to exercise caution, as such products may not see the same flows that funds based on Bitcoin after its launch.

Beware of ETF expectations Ethereum

The reflection is made by analyst Nikolaos Panigirtzoglou, who together with his team published a 25-page report analyzing in detail the outlook for ETFs Ethereum in cash, anticipating that these could be below what was seen with the funds Bitcoin, can generate disappointment among enthusiasts with very high expectations.

In this regard, Panigirtzoglou and the analysts indicate:

We believe demand for Ethereum ETFs would be a fraction of that seen for Bitcoin spot funds.

Among the reasons why they do not believe that funds based on Ethereum in cash perform the same as those of Bitcoin, The following points stand out:

• First, as ETFs have arrived Bitcoin Earlier, they absorbed much of the traditional market demand for cryptoassets.
• On the other hand they quote the halvin Bitcoin, event that reduced the margin of issuance of new BTC a couple of months ago. The reduction in liquidity accentuated demand much more, making the shares much more attractive for investors, something that does not happen with Ethereum by operating under a different consensus algorithm.
• They also cite the fact that ETFs Ethereum that will reach the market do not allow funds to stake the assets in custody, which closes an additional profit mechanism that could greatly benefit investors. This makes them less attractive compared to other escrow protocols, which can be easily accessed with cryptocurrencies directly.
• And finally there is the narrative of “Bitcoin as digital gold“, which establishes the cryptocurrency as a direct competitor of the precious metal as a store of value. In the case of Ethereum It does not fall within this premise, since when it is used as a mechanism for more everyday applications and use cases, it does not fall within that same premise.

Therefore, analysts JPMorgan They are modest in relation to expectations, and hope that the Ethereum ETF capitalize “between USD $1,000 and USD $3,000 million in net inflows during the remainder of 2024,” This is assuming that they begin operations before the end of this year.

The wait for ETFs Ethereum cash

Reading about ETF performance Ethereum The cash sale occurs in the midst of the wait for the arrival of these products to the market, which despite having already been approved, are waiting for the final certification of the Securities and Exchange Commission (SEC) to formally begin operations.

As has been said in previous editions, the surprise approval of ETFs Ethereum cash has become a political issue, since the approval by the SEC It came about when it was thought that such requests would be rejected.

Some figures believe that the US government led by President Joe Biden is using this issue to its advantage, and seeks to convey a more friendly perspective towards the crypto sector so that this translates into votes in favor of his re-election. Therefore, even analysts of JPMorgan They theorize that this product could hit the market before the elections scheduled for the end of the year.

Article by Angel Di Matteo / DiaroBitcoin

Picture of Unsplash, edited with Canva

WARNING: This is an informative article. DiarioBitcoin is a media outlet, it does not promote, endorse or recommend any particular investment. It is worth noting that investments in cryptoassets are not regulated in some countries. They may not be suitable for retail investors as the entire amount invested could be lost. Check the laws of your country before investing.