Following last week’s abrupt approval of the Ethereum Spot ETF, speculation continues to swirl about the funds’ potential performance ahead of their debut trading session. Recently, renowned Bloomberg ETF analyst James Seyffart weighed in on this topic, offering his thoughts on the possible level of investment that spot ETFs could draw compared to their Bitcoin-based counterparts.

ETH Spot ETF Limited by Ethereum’s Usability and Other Factors – Analyst

In job interview for X On May 24, hosted by Bitwise Chief Investment Officer Matt Hougan, Seyffart stated that spot Ether ETFs will likely see a maximum of 25% of the demand seen by spot Bitcoin ETFs.

Seyffart based his predictions on many factors, starting with the huge differences in the market capitalization of the two assets. According to data from CoinMarketEthereum’s total market share is estimated at $449.25 billion, which is approximately 30% of BTC’s market capitalization of $1.35 trillion.

Moreover, the analyst also highlighted the enormous discrepancies in the difference between both ETFs and their underlying assets. According to Seyffart, there is a larger gap between Ethereum as an ETF and cryptocurrency than Bitcoin as an ETF and itself.

The ETF analyst believes that spot ETH ETFs will limit investors’ access to native ETF features such as staking, an critical source of passive income and other on-chain apply cases in DeFi, NFTs, DAOs, etc. Therefore, some investors may prefer to invest directly in altcoin.

Taking all these factors into account, Seyffart predicts that these novel mutual funds will result in “big launches,” but not at the level of spot Bitcoin ETFs. It predicts that Ethereum Spot ETFs will see 20 to 25% of the investment in their Bitcoin-based counterparts once they begin trading. Meanwhile, another Bloomberg analyst, Eric Balchunas, seems less positive and forecasts 15-20%.

Without a doubt, the performance of Ethereum spot ETFs will have an impact on other cryptocurrency ETFs that may receive approval from the U.S. Securities and Exchange Commission. Currently, many enthusiasts indicate that the XRP ETF will be the next debutant on the market, but this is still dependent on many factors, in particular the transparency of regulations regarding the institutional sale of XRP.

Etherum Price Overview

In other news, Ethereum is trading at $3,766, up 0.51% in the last day. This slight positive result highlights Ethereum’s form throughout the week, with a cumulative gain of 20.47% recorded over the last seven days. Meanwhile, ETH’s daily trading volume dropped by 51.27% and is valued at $10.03 billion.

Featured image from BitMEX, chart from Tradingview