The CIO of Bitwise Asset Management, Matt Hougan, is optimistic about the potential of spot Ethereum (ETH) exchange-traded funds (ETFs) once they are approved by the U.S. Securities and Exchange Commission (SEC). In a recent communication to investors, Hougan predicts that ETH ETFs could attract billions of dollars in net flows within the first eighteen months of approval, estimating at least $15 billion in inflows.

Hougan’s projection is based on various factors, including ETH’s market capitalization in comparison to Bitcoin, the performance of similar products in other markets like the UK and Canada, and the impact of the carry trade strategy. The carry trade strategy involves purchasing spot Bitcoin (BTC) ETFs/ETPs and selling Bitcoin futures contracts to profit from the price difference.

Despite the potential for growth, Hougan acknowledges that his estimate does not consider other factors driving Ethereum’s expansion, such as the increasing use of stablecoins, regulatory clarity, and the recent reduction in transaction costs following the blockchain’s Dencun upgrade. He believes that a strong bullish market for ETH could further drive demand.

While Hougan believes that $15 billion in net new demand is a solid starting point, he is optimistic that the actual inflows could surpass this figure due to Ethereum’s versatility as a blockchain powerhouse. He emphasizes that even $15 billion in new demand would have a significant impact on the Ethereum market.

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