Cryptocurrency analyst Tom Dunleavy is predicting a bright future for Ethereum (ETH),, fueled by the imminent launch of spot ETFs in the United States. Dunleavy, a managing partner at MV Global, expects these ETFs to attract significant investment, pushing ETH prices to new highs by the end of the year.
His prediction hinges on the potential for $5 billion to $10 billion in inflows to ETH ETFs in the months following their launch. This figure, while lower than the $15 billion seen with Bitcoin (BTC) ETFs earlier this year, could have a more pronounced impact on ETH’s price due to its lower exchange liquidity.
“We saw $15 billion in flows for Bitcoin. I think we’re probably going to see $5 billion to $10 billion for Ethereum,” Dunleavy told Cointelegraph. “I expect a very positive price impact, sending us to new all-time highs by early Q4.”
Currently, eight spot ETH ETFs are awaiting regulatory approval and could begin trading as soon as this month. These new additions will join existing Bitcoin ETFs, which currently manage a combined $15.9 billion.
Dunleavy anticipates a “base case” scenario of roughly $1 billion flowing into ETH ETFs each month for the foreseeable future. He emphasizes that ETH’s lower exchange availability compared to BTC creates a more susceptible market for price increases due to ETF buying pressure.
“The BTC ETF led to a price appreciation of 36% from the January 10th launch date to the peak and >50% from the time of initial speculation and rumors,” Dunleavy wrote in a Q2 investor memo.
He further highlights the potential appeal of ETH to traditional investors due to its utility and cash flow generation. “ETH has cashflows. It can be described as a tech stock, the app store of crypto, or an internet bond. This is a much easier sell for financial advisors than ‘digital gold,'” the memo states.
While ETH has underperformed BTC so far in 2024, Dunleavy cautions that a potential ETH surge might not necessarily translate to similar gains for other altcoins due to the distinct nature of institutional and retail investor behavior in the crypto market.
“Ether ETF investors ‘are not going to be users who were onchain [actively using the blockchain]. They’re going to be users who were holding the stuff in their 401k,'” Dunleavy said.
With the launch of spot ETH ETFs on the horizon, Dunleavy’s prediction paints an optimistic picture for the future of Ethereum. Increased institutional investment and a potentially more responsive price due to lower liquidity could very well propel ETH to new record highs by the end of the year.