Ether’s price is at risk of plummeting to $2,400 following the launch of spot Ether ETFs, warns Andrew Kang, founder and partner at Mechanism Capital, a crypto-focused venture capital firm. In comparison to Bitcoin, Ether attracts less institutional interest, and there are limited incentives for converting spot Ether into ETF form. Kang predicts that after the ETF launch, Ether’s price could range from $2,400 to $3,000. This significant drop would be a setback for Ether, which reached over $4,000 in March. Kang estimates that spot Ether ETFs may attract around 15% of the flows seen by spot Bitcoin ETFs, aligning with the range suggested by Bloomberg ETF analysts. He also raises concerns about Ethereum’s valuation and questions its value proposition as a decentralized financial settlement layer. The surprise approval of spot Ether ETFs may limit the time for issuers to market their products to institutional investors. Additionally, the absence of staking in the proposed ETFs could deter investors from converting their spot Ether holdings. Several prominent asset managers, including VanEck, BlackRock, Grayscale, Invesco Galaxy Digital, and Fidelity, have submitted revised proposals for Ethereum ETFs to the SEC, providing updated information on their respective funds. VanEck’s filing revealed a management fee of 0.20%, while BlackRock has yet to announce its fee structure for its iShares Ethereum Trust.
