Although Ethereum has delivered higher returns than Bitcoin since the start of the year, investor sentiment remains bearish on its ETF prospects.

While trading in spot Ethereum exchange-traded funds (ETFs) has not yet commenced, reports indicate that investors are already showing a negative outlook towards the second-largest cryptocurrency. Sean Farrell, Head of Digital Asset Strategy at Fundstrat, noted this bearish sentiment.

Despite this, Farrell pointed out that hedge funds could still significantly boost these ETFs by exploiting basis trade opportunities, which are the differences between spot and futures markets. Fundstrat Global and Galaxy Digital estimate that spot Ethereum ETFs could see $5 billion in net inflows within the first five months. However, Galaxy Digital warns that the absence of staking in these ETFs might affect demand.

Despite the bearish outlook, the approval of spot Ethereum ETFs could mark a pivotal milestone for the broader crypto industry.

VanEck has recently indicated its intention to launch a spot ETF for Solana, another major cryptocurrency. Analysts at GSR Markets, one of the oldest crypto market makers, project that the introduction of spot Ethereum ETFs could pave the way for more top-100 cryptocurrencies to enter traditional markets. Based on factors like decentralization and demand, GSR Markets anticipates that ETFs for NEAR Protocol (NEAR), Avalanche (AVAX), and Aptos (APT) could follow after Solana’s approval.

The timeline for the U.S. Securities and Exchange Commission (SEC) to approve these filings is still uncertain. Some sources suggest that the SEC could approve spot Ethereum ETFs as soon as July 4. However, Bloomberg’s senior ETF analyst, Eric Balchunas, believes that spot Solana ETFs are unlikely to be approved before 2025.

Since the beginning of the year, Ethereum’s price has surged by approximately 51%, outpacing Bitcoin by 6% and Solana by 13%, according to recent data.

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