Bombastic Ethereum Price Prediction After ETF Launch

Matt Hogan, Chief Investment Officer at Bitwise Asset Management, anticipates a significant rise in Ethereum's price following the launch of Ethereum ETFs.

He projects that inflows into these ETFs could push Ethereum’s value beyond $5,000, potentially reaching new all-time highs by the year’s end.

Hogan suggests that the introduction of ETH ETFs will create substantial new demand, mirroring the impact observed with Bitcoin ETFs. However, he also foresees initial volatility as funds may exit the $11 billion Grayscale Ethereum Trust (ETHE) upon its conversion to an ETF.

The expected price increase is driven by supply and demand dynamics, with ETFs generating additional demand without altering Ethereum’s supply fundamentals. Hogan noted that since Bitcoin ETFs launched in January, they have acquired 263,965 BTC, compared to the 129,181 BTC mined, resulting in a notable price surge.

Hogan believes that Ethereum may experience a greater impact from ETF inflows compared to Bitcoin for several reasons. Firstly, Ethereum’s inflation rate has been 0% over the past year, maintaining a steady supply of 120 million ETH, unlike Bitcoin’s 1.7% inflation rate at the time of its ETF launch.

Secondly, Ethereum holders face less pressure to sell their holdings compared to Bitcoin miners, which reduces daily forced sales. Additionally, a significant portion of Ethereum is staked or locked in DeFi contracts, with 28% of all ETH staked and effectively unavailable for market trading.

Hogan predicts that Ethereum ETFs could attract $15 billion in new assets within 18 months, potentially propelling ETH from its current price of $3,400 to new heights, surpassing its previous records.