Ether will rise to $6,500 later this year due to spot ETF inflows

The cryptocurrency market is too pessimistic about the upcoming launch of the Ether (ETH) spot exchange-traded fund (ETF) in the United States, with net inflows likely to reach $20 billion in the first year, according to a Steno Research report published on Thursday, noting that ether has qualities that appeal to Wall Street.

"We continue to forecast net inflows of $15 billion to $20 billion in the first 12 months, even accounting for outflows from the Grayscale Ethereum Trust (ETHE)," wrote senior analyst Mads Eberhardt, which should drive the value of ether higher. Both in US dollars and relative to Bitcoin (BTC).

Ether is expected to reach at least $6,500 later this year due to anticipated physical ETF inflows, as well as other positive factors, the report said.

The spot Ether ETF is about to begin trading in the United States, as the Securities and Exchange Commission (SEC) approved the issuer's application last month. These new products will begin trading once the S-1 application is approved, which could happen as soon as next week, according to the report.

If the projected physical ether ETF inflows are correct, the ether/Bitcoin ratio should strengthen to 0.065 later this year, Steno noted.

"A smaller amount flowing into an ether ETF would have a greater impact on ether compared to a Bitcoin ETF because the ether market is less capitalized and quite illiquid," the report adds, "Thus, flows into an ETH spot ETF are more likely to exceed than underperform expectations."

Steno's expectations for physical ether ETF inflows are more optimistic than others. Galaxy Research said the spot Ether ETF could see net inflows of $5 billion in the first five months. Asset manager Bitwise forecasts net inflows of $15bn in the first 18 months.