Ether is the digital silver an 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 seen as digital silver? Bitfinex analyzed the example of gold and silver ETFs, suggesting 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. Analysts at Bitfinex provided a historical example of how fund managers shift funds between multiple related ETFs to balance risks. The launch of gold ETFs provides a historical resemblance, as new gold ETFs attract significant investments that impact 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 launched in November 2004, when the SPDR Gold Trust (GLD) debuted on the New York Stock Exchange, revolutionizing gold trading by providing investors with a convenient and liquid way to invest in gold without physical ownership. When the first silver ETF was introduced in 2006, investors increased their positions and shifted funds, especially due to the increasing demand for silver in industrial applications.
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 a role similar to silver.
While people have always regarded Bitcoin as digital gold, possessing the same hedging value as gold, comparing Ethereum to silver also makes sense. Both silver and gold are precious metals that were once considered currency in ancient times. However, silver is also an important industrial metal with wide applications in electronics, photography materials, pharmaceuticals, and chemical industries. Compared to Bitcoin’s payment applications, ETH has more practical and embedded applications, supporting Ethereum being referred to as digital silver.
Balchunas estimates that the performance of an Ethereum spot ETF, achieving about 10% of a Bitcoin spot ETF’s performance, would already be quite good. Ethereum ETF, silver, gold.
