Ether is digital silver Ethereum spot ETF may attract 10 of Bitcoin ETF funds
People have always regarded Bitcoin as digital gold, possessing the same hedging value as gold. Can Ethereum, which has smart contracts, be regarded as digital silver? Bitfinex’s analysis with gold and silver ETFs suggests that an Ethereum spot ETF has the potential to capture 10-20% of the funds currently flowing into Bitcoin ETFs.
According to a report by The Block, Jag Kooner, the derivatives product manager at Bitfinex, stated that an Ethereum spot exchange-traded fund (ETF) could capture 10-20% of the funds currently flowing into Bitcoin ETFs.
Bitfinex analysts provided a historical example of how fund managers transfer funds between multiple related ETFs to balance risks. The launch of gold ETFs has similarities to historical events, as when new gold ETFs were introduced, they attracted significant investments, affecting the flow of existing financial products related to gold. Similarly, the introduction of an Ethereum ETF could lead fund managers to reallocate funds to balance their exposure to Bitcoin and Ethereum.
The first gold spot ETF was introduced in November 2004, when the SPDR Gold Trust (GLD) made its debut on the New York Stock Exchange, revolutionizing gold trading by providing investors with a convenient and liquid way to invest in gold without physical possession. When the first silver ETF was introduced in 2006, investors increased their positions and moved funds into it, especially due to the increasing industrial demand for silver.
Therefore, it is speculated that if an Ethereum spot ETF is officially launched, it could capture 10-20% of the funds currently flowing into Bitcoin ETFs.
Bloomberg ETF analyst Eric Balchunas is also studying silver ETFs and gold ETFs, viewing Ethereum as playing a similar role to silver.
While people have always regarded Bitcoin as digital gold, possessing the same hedging value as gold, drawing parallels between Ethereum and silver also makes sense, as both silver and gold are precious metals that have been considered currency in ancient times. However, silver is also an important industrial metal, with high electrical and thermal conductivity ranking it among the top in metals, making it widely used in industrial production such as electronics, photosensitive materials, pharmaceuticals, and chemicals.
Compared to Bitcoin’s payment applications, ETH has more practical and embedded applications, supporting the important reason for Ethereum being referred to as digital silver.
Balchunas estimates that the performance of an Ethereum spot ETF would already be quite good if it reaches about 10% of a Bitcoin spot ETF’s performance.
Ethereum ETF
Silver
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