US Spot Ethereum ETFs Could Absorb Over 1 Million ETH in First 5 Months: K33 Research

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The launch of spot Ethereum exchange-traded funds (ETFs) in the United States could trigger a significant shift in crypto market dynamics, with an estimated inflow of over 1 million ETH within the first five months of trading. According to a recent report by K33 Research, these ETFs may attract between $3.1 billion and $4.8 billion in net assets during their initial phase.

This projection is based on comparative analysis between the Bitcoin and Ethereum markets, particularly drawing parallels with the performance of spot Bitcoin ETFs since their debut in January 2024. As the U.S. Securities and Exchange Commission (SEC) has already approved key 19b-4 filings for spot Ethereum ETFs, anticipation is building around the final S-1 registration approvals that will allow these funds to begin trading.

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Market Parallels Between Bitcoin and Ethereum ETF Adoption

K33’s senior analyst Vetle Lunde and DeFi analyst David Zimmerman highlighted that approximately 3.3% of Ethereum’s circulating supply is currently held in investment products—a figure that has been steadily declining since the peak of the last crypto bull run in November 2021. This trend mirrors what was observed in the Bitcoin market before the launch of spot BTC ETFs, where holdings in investment vehicles dropped to 4.1% before rebounding to 5.6% post-approval.

Globally, Ethereum-based exchange-traded products (ETPs) manage assets equivalent to about 28.2% of their Bitcoin counterparts—excluding U.S. spot Bitcoin ETFs. In more mature non-U.S. markets like Canada and Europe, this ratio climbs to around 33%. Although U.S.-listed Ethereum futures ETFs lag far behind, representing only 5% of the assets under management compared to Bitcoin futures ETFs, analysts attribute this gap to timing differences rather than weak demand.

“CME’s ETH open interest currently stands at 22.9% of BTC’s, with a historical average of 35% since launch—indicating strong institutional demand for ETH in the U.S., reinforcing the argument that futures ETFs are not representative indicators,” noted the K33 analysts.

By applying these comparative market weights to the $14 billion in net inflows seen by spot Bitcoin ETFs since January 2024, K33 estimates that spot Ethereum ETFs could accumulate between 800,000 and 1.26 million ETH in their first five months—equivalent to 0.7% to 1.05% of Ethereum’s total circulating supply.

Such a level of supply absorption could exert meaningful upward pressure on ETH prices, especially given the established correlation between ETF inflows and annual asset performance observed in Bitcoin’s case.

Will Lack of Staking Derail Investor Interest?

One major concern among investors has been whether the absence of staking rewards in U.S.-listed spot Ethereum ETFs will dampen demand. Unlike some global ETPs that offer exposure to staking yields, SEC-approved Ethereum ETFs are expected to forgo staking mechanisms—a move widely seen as essential for regulatory approval.

However, K33 researchers argue that this limitation is unlikely to hinder adoption significantly. They point out that over 98% of assets invested in Ethereum ETPs across Europe and Canada are already held in non-staking vehicles.

“The lack of staking has clearly not been a dealbreaker for ETP investors in other regions,” the report emphasizes.

This suggests that ease of access through regulated financial instruments outweighs the opportunity cost of forgone staking rewards for most institutional and retail investors.

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Core Factors Driving Ethereum ETF Demand

Several underlying trends support K33’s bullish outlook:

Moreover, early data from Bitcoin ETFs shows that consistent inflows can sustain price momentum even without yield-bearing features. If Ethereum follows a similar trajectory, it could reinforce its position as the second-largest digital asset by market cap—and potentially accelerate its path toward broader mainstream adoption.

FAQ: Understanding Spot Ethereum ETFs

Q: What is a spot Ethereum ETF?
A: A spot Ethereum ETF tracks the real-time price of ETH by directly holding the asset. It allows investors to gain exposure without managing private keys or exchanges.

Q: Why does staking matter for Ethereum investors?
A: Staking allows ETH holders to earn yield by participating in network validation. However, most regulated ETFs exclude staking to simplify compliance and custody arrangements.

Q: When will U.S. spot Ethereum ETFs start trading?
A: Trading can begin only after the SEC approves S-1 registration statements from fund issuers. While no official date has been set, approvals are expected in mid-to-late 2025.

Q: How might ETF inflows affect ETH’s price?
A: Large-scale buying from ETFs reduces available supply in the market. Combined with growing demand, this can drive price appreciation—a pattern seen with Bitcoin ETFs.

Q: Are non-U.S. Ethereum ETPs different from proposed U.S. ETFs?
A: Yes. Some European and Canadian ETPs offer staking rewards and are structured differently under local regulations. U.S. versions will likely prioritize regulatory compliance over yield generation.

Q: Could Ethereum ETFs surpass Bitcoin ETF adoption?
A: While unlikely in absolute dollar terms initially, Ethereum’s utility-driven ecosystem may attract unique investor interest over time, especially from those focused on Web3 innovation.

The road ahead for spot Ethereum ETFs appears promising. With strong precedent from Bitcoin’s ETF success and growing global interest in regulated crypto access, the stage is set for a transformative period in digital asset investing.

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As final S-1 approvals loom, market participants remain watchful—knowing that each step forward could unlock billions in new capital flow and reshape the future of blockchain-based investing.