Bernstein and JPMorgan Chase share the same view: Ethereum spot ETF demand is far less than Bitcoin

According to a report by Bernstein cited by Coindesk, the demand for Ethereum spot ETFs is expected to be much lower than that for Bitcoin spot ETFs. This is consistent with JPMorgan Chase's previous view, which emphasizes that ETH does not have a demand catalyst like Bitcoin halving, and Bitcoin investors have a different value proposition for it than ETH, and cannot be compared.

Bernstein: Ethereum and Bitcoin are essentially different

Ethereum spot ETF lacks staking function

In a report on Monday, Bernstein analysts Gautam Chhugani and Mahika Sapra predicted the demand for Ethereum spot ETFs, saying that its scale will be far less than that of Bitcoin spot ETFs, and pointed out the reason: Since Ethereum spot ETFs lack staking functions, the demand for spot conversion will be relatively small.

In other words, Ethereum spot ETFs allow investors to hold ETH through traditional financial channels, but most ETH holders are actively participating in the Ethereum ecosystem to obtain the benefits given by the staking platform.

Therefore, instead of buying Ethereum spot ETFs, investors might as well hold real ETH directly on the chain, which will be more efficient and profitable.

Analysts also pointed out that despite the recent correction in the crypto market, institutional adoption continues to grow as expected.

They expect that the main healthy liquidity creators in the Ethereum spot ETF market in the future will be basis traders, who will promote liquidity in the ETF market through arbitrage transactions between spot ETFs and futures contracts.

Ethereum's main use case is a tokenization platform

At the same time, analysts also clarified the essential differences between Ethereum and Bitcoin: ETH, as the main tokenization platform, is building a strong use case for stablecoin payments and tokenization of traditional assets (RWA).

Yesterday, Bloomberg analyst Eric Balchunas and SEC Chairman Gary Gensler both expressed optimism about the approval progress of the Ethereum spot ETF. The former pointed out that the Ethereum spot ETF will be approved for listing as early as July 2, and investors are also waiting to see.

Crypto regulation will become clearer around the election

Finally, facing the current situation of unclear crypto regulation, analysts agree that digital assets, including ETH, need a more complete regulatory system, and this situation may be improved around the US election in November: as the chances of the Republican Party winning the election gradually increase, and its presidential candidate Trump tends to support cryptocurrencies, relevant regulations will be improved.

JPMorgan Chase: Bitcoin spot ETF has first-mover advantage

Previously, Wall Street giant JPMorgan Chase also made a forecast on the market size of Ethereum spot ETF, saying that it will attract up to $3 billion in net inflows this year, but compared with the Bitcoin spot ETF market, it is still a small witch compared to a big witch.

Bitcoin has a first-mover advantage

Analyst Nikolaos Panigirtzoglou expressed the same view as Bernstein in the report, believing that the scale of Ethereum spot ETF will be much smaller than Bitcoin spot ETF: Bitcoin spot ETF already has a first-mover advantage, which may have saturated the overall market demand for crypto assets.

And added, "Bitcoin competes with 'gold' in investors' portfolio allocation, which is more attractive to investors than Ethereum."

Bitcoin has halving impetus, Ethereum does not

In addition, in terms of market momentum, the Bitcoin halving event, as a potential bullish event, is also an additional catalyst for creating demand for Bitcoin spot ETFs: Ethereum does not have a similar driving force for this.

Ethereum liquidity is not as good as Bitcoin

Finally, the analyst also mentioned that since the trading activity in the Ethereum market is not as active as Bitcoin, and the total assets under management (AUM) are also smaller, institutional investors may not be as interested in Ethereum spot ETFs as Bitcoin spot ETFs.

Overall, JPMorgan believes that the market's initial reaction to Ethereum spot ETFs may be negative, which may put downward pressure on ETH prices.