Spot Ethereum ETFs set to launch on Tuesday, but may only capture 10-12.5% of Bitcoin ETF assets

Spot Ethereum exchange-traded funds are set to launch in the US on Tuesday, but they may not attract as much attention as their Bitcoin counterparts did earlier this year. According to market maker Wintermute, Ethereum ETFs are expected to only gain between 10% to 12.5% of the assets that Bitcoin ETFs accumulated.

One major reason for this lower projected interest is the absence of a staking mechanism in Ethereum ETFs. Staking allows investors to lock their holdings in the network and earn a 3% yield in Ether. Without this feature, some investors may be hesitant to jump into Ethereum ETFs.

Additionally, investors will have to pay management fees ranging from 0.15% to 2.5%, which could further deter potential buyers. Analysts like Adam Morgan McCarthy of Kaiko Research believe that paying these fees without the staking element may not be worth it for many investors.

However, there is still hope for Ethereum ETFs to gain more traction in the future. Wintermute mentioned that a change in leadership at the Securities and Exchange Commission could pave the way for Ethereum ETFs to implement a staking feature, potentially increasing their appeal.

Despite the challenges, Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart believe that Ethereum ETFs could still attract between 15% to 25% of the assets that Bitcoin ETFs received. This would mean US Ethereum ETFs could amass between $4.8 billion to $8 billion in assets within a year.

As the crypto world eagerly awaits the launch of Ethereum ETFs, the industry is buzzing with speculation about their potential success. Stay tuned for more updates on this developing story.