In last week’s investment memo, I predicted that by the end of 2025, Ethereum ETPs will bring in $15 billion in net inflows. This would be a significant achievement, potentially making Ethereum ETPs one of the most successful ETPs ever.
However, Ethereum ETPs still cannot compare to Bitcoin ETPs. Within less than six months of their launch, Bitcoin ETPs have already attracted $14 billion in net inflows. I expect this figure to soar to over $50 billion by the end of 2025, especially with the involvement of financial giants like Morgan Stanley and Merrill Lynch.
From a market capitalization perspective, Bitcoin is three times the size of Ethereum. Therefore, it makes sense that Bitcoin ETPs attract three times as much capital as Ethereum ETPs.
But ever since I wrote that memo, some things have been on my mind. If things develop differently, Ethereum ETP performance might far exceed my expectations.
Here’s why.
Ethereum is Like a High-Growth Tech Stock
Naive investors (and some media) often lump Bitcoin and Ethereum together. It’s easy to see why: they are the two largest crypto assets. But our readers should know that they are fundamentally different, like gold and oil.
By design, Bitcoin is a new kind of monetary asset. It aims to compete with gold, the dollar, and other fiat currencies, serving as a store of value and ultimately a medium of exchange.
This is an exciting field. The gold market is worth over $10 trillion, and the “money” market is the largest in the world. If Bitcoin successfully taps into these markets, its value could increase tenfold or more.
Ethereum, on the other hand, is entirely different. Ethereum is structured as a technology platform: a fully programmable blockchain that serves as the backbone for new types of crypto applications such as tokenization, stablecoins, and decentralized finance (DeFi).
The economics of Ethereum are straightforward: all else being equal, as more people use these applications, the value of the asset ETH on the Ethereum blockchain increases because you have to pay ETH to use the platform.
Why Ethereum ETP Performance Might Exceed Expectations
This is why I suspect Ethereum ETP performance might exceed expectations. After all, investors love tech stocks. Almost every investor has invested in high-growth tech stocks like Nvidia and Meta, while fewer investors are drawn to monetary assets like gold.
Imagine what would happen if investors sold a small portion of their tech stocks and bought ETH instead? I believe that, compared to investing in a new monetary asset, investors would prefer to hold a tech asset like Ethereum.
Therefore, we need to bring Ethereum’s core concept—that ETH is a tech investment—into the mainstream. To do this, we need to achieve two things:
- More people need to understand the differences between Ethereum and Bitcoin.
- Some applications built on Ethereum need to gain mainstream attention.
What would that look like? Imagine if the assets in stablecoins grew from $160 billion to $1.6 trillion as more people embraced the speed and transparency of blockchain payments; or if DeFi opened up new lending channels with regulatory clarity; or if more companies followed BlackRock’s lead in creating tokenized funds on Ethereum.
Perhaps investors need a new ETF with 10% ETH and 90% tech stocks.
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