Why Ether ETFs Could Lead to Record Highs for Ethereum
Low Inflation Rate:- Ethereum’s inflation rate is near zero. With high usage of Ethereum-based apps, the daily creation of ETH is minimal, limiting new supply.
Staking vs. Mining Costs:- Bitcoin miners must sell BTC to cover high operating costs. In contrast, Ethereum stakers have low direct costs, reducing immediate selling pressure.
Locked ETH:- Around 28% of all ETH is staked and locked, keeping it off the market. This limits available supply, potentially driving up prices as demand grows.
Impact on Price:- These factors combined mean Ether ETFs could push ETH prices higher than Bitcoin ETFs did for BTC, according to Bitwise CIO Matt Hougan.
Market Predictions:- Hougan predicts ETH could hit $5,000 by the end of 2024. Inflows from ETFs might exceed expectations, leading to even higher prices.