The anticipated launch of Ethereum exchange-traded funds (ETFs) is set to attract substantial investment, with projections suggesting up to $10 billion in inflows. According to Tom Dunleavy, managing partner at crypto investment firm MV Global, this influx is expected to drive Ether prices to unprecedented heights by year-end.

Tom Dunleavy highlighted the potential for Ethereum ETFs to attract significant investment, following a similar pattern to Bitcoin ETFs. “We saw $15 billion in flows for Bitcoin. We’ll probably see $5 billion to $10 billion for Ethereum,” Dunleavy told Cointelegraph. He anticipates a positive price impact, predicting that Ether could reach new all-time highs by early Q4.

United States regulators are reviewing eight spot Ether ETFs, with trading expected to commence soon, possibly within this month. These funds will join the existing roster of Bitcoin ETFs, which commenced trading in January. Collectively, Bitcoin ETFs currently manage approximately $15.9 billion.

Dunleavy expects ETH ETFs to attract around $1 billion monthly in the coming months. He emphasized that compared to Bitcoin, Ether is less available on exchanges. This reduced availability means thinner order books and less Ether available for purchase, making ETH’s spot price more responsive to buying demand from ETFs than Bitcoin’s.

Market dynamics and price impact

The launch of Bitcoin ETFs led to a significant price appreciation for Bitcoin. “The BTC ETF led to a price appreciation of 36% from the January 10th launch date to the peak and over 50% from the time of initial speculation and rumors,” Dunleavy wrote in a Q2 investor memo shared with Cointelegraph.

Dunleavy believes a similar scenario could unfold for Ether, driven by strong buy pressure and a clearer narrative that traditional investors can relate to. “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,'” he explained in the memo.

According to data from Cointelegraph Markets Pro and TradingView, ETH has underperformed Bitcoin this year, experiencing sharper declines during market downturns. Despite this, Dunleavy remains optimistic about ETH rebounding, though he cautioned that this may not benefit altcoins. He noted the disparity between crypto’s institutional and retail markets as a contributing factor.

Institutional interest and market behavior in Ethereum ETFs

Investors’ interest in Ethereum ETFs is expected to drive significant inflows. Dunleavy noted that Ether ETF investors will likely differ from the typical on-chain users. “They’re going to be users who were holding the stuff in their 401k,” he said. This shift could lead to a new wave of Ether investment, driving higher prices.

Ether supply on exchanges dwindles as more ETH is locked in staking contracts. This trend further supports the expectation of a price surge due to reduced availability and increased demand from ETF inflows.

The introduction of Ether ETFs marks a major milestone for the cryptocurrency market. It offers traditional investors a new way to access Ether, enhancing its legitimacy and acceptance as an investment asset. This move could stimulate broader adoption and potentially boost its market value.

The launch of Ethereum ETFs could revolutionize the cryptocurrency market, anticipating substantial inflows that could propel Ether prices to unprecedented levels. Investors are eagerly awaiting regulatory approval, anticipating how these funds will affect Ether’s spot price and the entire crypto market.