Ethereum ETF is about to launch: In-depth analysis of capital inflow and market prospects #以太坊突破3700# #山寨币爆发# #NFT市场回暖#

According to Farside Investors data, on July 19, the net inflow of the US Ethereum spot ETF reached $402.5 million, with BlackRock's ETHA net inflow at $394.9 million, indicating strong investor interest in Ethereum assets.
With the Ethereum ETF expected to officially launch on July 23, this article will delve into the potential impact of the ETF on the Ethereum market and its future trends.
The fee structure of the Ethereum ETF and innovative products
The fee structure of the Ethereum ETF is similar to that of the Bitcoin ETF, with most providers waiving fees for a certain period to attract asset under management (AUM) growth.
It is worth noting that Grayscale has launched a brand new "mini ETH ETF" with a fee of only 0.25%, which is significantly lower than the high fee of 2.5% for its traditional ETHE product.
This move aims to guide fee-sensitive investors from high-fee products to more competitive mini ETFs, avoiding capital outflow.
In addition, Grayscale will transfer 10% of its ETHE assets to a mini ETF and give them for free to ETHE holders. This operation is not a taxable event and helps alleviate the outflow pressure on ETHE.
Analysis of Capital Inflow Scale and Liquidity
Multiple institutions have predicted the scale of fund inflows into the Ethereum ETF, with an average monthly inflow of about 1 billion USD. Standard Chartered's highest estimate reaches 2 billion USD, while JPMorgan predicts about 500 million USD.
By analyzing the data of cryptocurrency trading products (ETP) in Hong Kong and Europe, it is found that the asset management scale ratio of BTC to ETH roughly corresponds to their market capitalization ratio, indicating a relatively balanced allocation of the market between the two.
It is worth noting that the trading price of ETHE has remained within a premium/discount range of 2% relative to its net asset value (NAV) since May 24, indicating that the market valuation of ETHE is relatively stable.
In contrast, Bitcoin's GBTC product experienced greater fluctuations in discount before transitioning to an ETF.
The unique reflexivity and ecosystem advantages of Ethereum
The launch of the Ethereum ETF not only brings in capital inflows but also activates Ethereum's unique reflexivity mechanism:
The inflow of funds into the ETF drives up the price of Ether.
The price increase has sparked market interest in Ethereum.
The activity level of the DeFi ecosystem has increased, with greater on-chain usage.
The EIP-1559 burning mechanism accelerates the reduction of Ether supply.
The reduction in supply further drives up the price of ETH.
Create a virtuous cycle to attract more capital inflow.
This feedback loop is what the Bitcoin ETF lacks. Ethereum, as a "decentralized application store," has a vast DeFi ecosystem, with up to 20 million ETH (approximately $63 billion) currently locked in DeFi protocols. As prices rise, the total locked value and revenue of DeFi will also grow in tandem, further enhancing the appeal of ETH.
Traditional financial perspective and future outlook
Traditional financial investors are relatively familiar with Bitcoin's positioning as "digital gold," while the value recognition of Ethereum as a smart contract platform is still gradually improving.
The launch of the spot ETF provides traditional capital with a more convenient investment tool, which is expected to facilitate more funds flowing into the Ether market.
In addition, the potential for staking ETH to obtain native yields is enormous. In the future, the launch of staking ETH ETFs is almost an inevitable trend. Investors will not only benefit from capital gains brought by price increases but also receive stable staking yields, which will greatly enhance the attractiveness of Ethereum assets.
The launch of the Ethereum spot ETF marks an important step in the integration of traditional finance and crypto assets. With continuous capital inflow, increased ecosystem activity, and the introduction of innovative products, Ethereum is expected to usher in a new growth cycle.