Ethereum ETFs Go Live

Eight exchange-traded funds tracking the price of Ethereum’s native token, ether, went live on Tuesday, marking a potentially bullish moment for the second-largest cryptocurrency by market capitalization. Industry commentators have predicted that these funds, similar to the successful spot Bitcoin ETFs, could drive up the price of ETH.

Kaiko’s Head of Indexes, Will Cai, commented that “ETH price could be sensitive to inflow numbers of the first days,” although he noted that “a full demand picture may not emerge for several months.” Firms ranging from crypto market maker Wintermute to banking giant Citi have forecast billions of dollars of inflows into spot ETH funds this year.

However, traders on the betting market Polymarket appear less optimistic about ETH reaching a new all-time high due to these exchange-traded products. Prediction markets, where users can bet on future events, may be less biased as participants have financial stakes in the outcomes.

Since the beginning of the year, Ethereum has rallied approximately 51% to around $3,457. This figure is still over $1,000 shy of its previous peak of over $4,600 reached in late 2021. Notably, Bitcoin achieved an all-time high of over $72,000 two months after 11 spot Bitcoin ETFs launched.

Multiple live markets on Polymarket currently allow traders to bet on the rise in Ethereum’s price. The largest market, with nearly $780,000 at stake, has 50% of participants predicting “No ATH in 2024” for ETH, while about 30% believe ETH could surpass $4,600 by the fourth quarter.

Another pool indicates a less than 50% chance that ETH will exceed $3,500 by July 26. Interestingly, Bitcoin also experienced a price drop shortly after the launch of spot BTC ETFs. Other betting pools estimate a 13% chance of ETH climbing to $10,000 and an 8% chance of hitting $15,000 by year’s end.

Despite this caution, there are still bullish bettors, with one pool of $430,000 assessing a 54% chance of ether setting a new high this year.

Some experts suggest the launch of ETH ETFs could pave the way for similar products for tokens like Solana (SOL), Cardano (ADA), or Polygon (MATIC), but Polymarket users currently see minimal chances for these other funds to launch soon. Only 5% of traders believe a fund tracking Dogecoin (DOGE) will go live this year.