Ethereum spot ETFs will accumulate over $15 billion in net inflows within their first 18 months of hitting the U.S. market, predicted crypto asset manager Bitwise on Wednesday.

The firm’s year-and-a-half-long forecast would roughly match the net haul from Bitcoin ETFs ($14.4 billion) since their launch five months ago – from which excitement has helped drive BTC to new all-time highs.

Calculating Ethereum’s ETF Flows

Bitwise CIO Matt Hougan based his estimate on Bitcoin’s ETF figures and compared Ethereum to the overall size of Bitcoin’s market.

At present, Bitcoin’s market cap is $1.26 trillion, compared to Ethereum’s $432 billion market cap – implying a 3:1 asset ratio. Of said Bitcoin, $56 billion is locked within U.S. Bitcoin ETFs, which Hougan expects will rise to $100 billion by the end of 2025.

“By this logic, spot Ethereum ETPs will need $35 billion in AUM to reach parity,” he argued.

This figure doesn’t imply $35 billion of inflows, however. Firstly, Grayscale’s Ethereum Trust (ETHE) will immediately convert into an ETF at launch day with $10 billion from its outset, much like the Grayscale Bitcoin Trust (GBTC) converted holding $30 billion in assets. Factoring this in, Hougan reduces his estimate for ETF flows to $25 billion.

Still, the proportional differences between Bitcoin and Ethereum ETP sizes in other jurisdictions are almost identical. In Europe, Bitcoin ETPs hold €4.6 billion to Ethereum’s €1.3 billion. In Canada, Bitcoin ETPs control CAD 4.9 billion, while Ethereum-based funds own CAD $1.4 billion.

‘The fact that the split is roughly in line with the relative market capitalization of the two assets adds to my confidence that this kind of break-down reflects normal demand,” Hougan wrote.

Assuming a conservative ratio 78% BTC, 22% ETH as seen in in Europe, this puts Hougan’s estimate down to $18 billion for Ethereum ETF inflows.

Correcting For Cash And Carry

The estimate must also correct for the Bitcoin ETF market’s “carry trade,” Hougan said.

Analysts in recent months have highlighted that many institutions buying the Bitcoin ETFs are simply doing a “cash and carry trade” to earn risk-free yield, by longing the spot market while shorting the futures market. Since Bitcoin futures are often directionally long-biased, yields are usually quite high for this trade.

However, Hougan said the Ethereum basis trade is “not reliably profitable” enough for non-staked assets, meaning Ethereum ETFs won’t garner demand for this reason. “Removing carry-trade assets from our model cuts our flow estimate from $18 billion to $15 billion” he said.

With $15 billion of inflows, Hougan said the Ethereum ETF would be a historic success. Only four ETFs launched since January 2020 have gathered inflows at that level.

“ETH is one of the best-performing assets of all time, and in my honest opinion its best days are ahead of it,” Hougan concluded.

In a research report earlier this month, K33 Research predicted that the Ethereum ETFs would haul $4 billion of inflows within their first five months on the market. Back in March, Standard Chartered predicted that the ETFs would gather $45 billion in capital inflows within their first 12 months.