{"id":82255,"date":"2024-06-24T02:54:23","date_gmt":"2024-06-24T06:54:23","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=82255"},"modified":"2024-06-24T02:54:26","modified_gmt":"2024-06-24T06:54:26","slug":"andrew-kang-ether-could-drop-to-2400-after-spot-etf-launch","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/andrew-kang-ether-could-drop-to-2400-after-spot-etf-launch\/","title":{"rendered":"Andrew Kang: Ether Could Drop to $2,400 After Spot ETF Launch"},"content":{"rendered":"\n

Andrew Kang believes Ether could tumble to as low as $2,400 after the launch of spot Ether exchange-traded funds.<\/a><\/p>\n\n\n\n

\"Andrew
Andrew Kang: Ether Could Drop to $2,400 After Spot ETF Launch<\/figcaption><\/figure>\n\n\n\n

Andrew Kang, a founder and partner at Mechanism Capital, a crypto-focused venture capital firm, has predicted that Ether could decline to as low as $2,400 following the introduction of spot Ether exchange-traded funds.<\/p>\n\n\n\n

CoinGecko\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> indicates that Ether (ETH)\u00a0is currently trading at $3,410. A decline to $2,400 would mean a nearly 30% decrease from its current price.<\/p>\n\n\n\n

In a post on June 23, Kang stated that Ether has not garnered as much institutional interest as Bitcoin, that there are few incentives to convert spot Ether into ETF form, and that the network cash flows could have been more remarkable.<\/p>\n\n\n\n

\u201cHow much upside would an ETH ETF Provide? I would argue not much,\u201d Kang stated, adding:<\/p>\n\n\n\n

\n
\n
\n

\u201cAfter the ETF launch my expectation is $2,400 to $3,000.\u201d<\/p>\n<\/blockquote>\n<\/div>\n<\/div>\n\n\n\n


Since Ether had already exceeded $4,000 in March when Bitcoin reached a new all-time peak, the anticipated price could represent a substantial decline for the asset. It nearly reached the same level once more just days before the U.S. Securities and Exchange Commission (SEC) approved Ether ETFs.<\/p>\n\n\n\n

On Flows Relative to Spot Bitcoin ETFs <\/h2>\n\n\n\n

Kang anticipates that spot Ether ETFs will garner 15% of the flows that spot Bitcoin ETFs have experienced. This estimate falls within the 10-20% range predicted by Bloomberg ETF analysts Eric Balchunas and James Seyffart.<\/p>\n\n\n\n

Kang observed that the spot Bitcoin ETFs received only $5 billion in new funds during the initial six months, except funds converted from spot form.<\/p>\n\n\n\n

When extrapolating this data to Ethereum, it is suggested that the spot Ether ETFs receive $840 million in “true” inflows over the same duration.<\/p>\n\n\n\n

\"\"
Source: Andrew Kang<\/figcaption><\/figure>\n\n\n\n


\u201cI believe that the expectations of crypto natives are overinflated and disconnected from the true preferences of tradfi allocators,\u201d Kang stated.<\/p>\n\n\n\n

\n
\n
\n

\u201cThis implies that the ETF is more than priced in.\u201d<\/p>\n<\/blockquote>\n<\/div>\n<\/div>\n\n\n\n


Kang's price forecast is only sometimes accepted. Patrick Scott, an industry analyst called Dynamo DeFi, recently stated in an interview with Crypto journalists that he anticipates a \u201cexpects a similar directional movement” to the performance of spot Bitcoin ETFs. <\/p>\n\n\n\n

Nevertheless, he does not expect that the price of Ether will double. Van Eck, an asset management firm, thinks that spot Ether ETFs can propel Ether to $22,000 by 2030.<\/p>\n\n\n\n

High-Priced Technology Stock<\/h3>\n\n\n\n


Kang contended that Ethereum's presentation to investors as a decentralized financial settlement layer, a world computer, or a Web3 app store may have some validity; however, it is a “hard sell” when the data is examined.<\/p>\n\n\n\n

When fees were increased by decentralized finance and the final non-fungible (NFT) cycle, Ethereum's future as a cash flow “machine” appeared more optimistic. Nevertheless, this has not persisted, and Ethereum may now seem to be yet another overpriced technology asset, according to him:<\/p>\n\n\n\n

\n
\n
\n

\u201cAt $1.5B 30d annualized revenue, a 300x PS ratio, negative earnings\/PE ratio after inflation, how will analysts justify this price to their daddy's family office or their macro fund boss?\u201d<\/p>\n<\/blockquote>\n<\/div>\n<\/div>\n\n\n\n


Kang also stated that due to surprise approval, the issuers need more time to make marketing pitches toward institutional investors. However, Bitwise and VanEck are among the few authorized Ethereum ETF applicants who have already released Ethereum-themed advertisements.<\/p>\n\n\n\n

Kang also noted that the proposed spot Ether ETFs may discourage investors from converting their spot Ether into ETF form by eliminating pledging.<\/p>\n\n\n\n

Kang acknowledged that BlackRock and other financial institutions have initiated initiatives in the real-world asset tokenization space on Ethereum; however, he is still determining the extent to which this will affect the price of Ether.<\/p>\n\n\n\n

The executive of Mechanism Capital <\/use><\/svg><\/span><\/a>believes that the ETH\/BTC price ratio could decrease from 0.054 at current prices to as low as 0.035 within the following year.<\/p>\n\n\n\n

Nevertheless, Kang believes that a Bitcoin price increase to $100,000 within the next six to nine months could “pull” Ether to a new all-time high.<\/p>\n","protected":false},"excerpt":{"rendered":"

Andrew Kang believes Ether could tumble to as low as $2,400 after the launch of spot Ether exchange-traded funds. Andrew Kang, a founder and partner at Mechanism Capital, a crypto-focused venture capital firm, has predicted that Ether could decline to as low as $2,400 following the introduction of spot Ether exchange-traded funds. CoinGecko indicates that […]<\/p>\n","protected":false},"author":53,"featured_media":67128,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23],"tags":[20092,5555,6122],"class_list":["post-82255","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ethereum-news","tag-ether-etf-2","tag-ethereum-3","tag-ethereum-price-prediction"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/12\/ETF.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/82255","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/53"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=82255"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/82255\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/67128"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=82255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=82255"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=82255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}