Crypto VC predicts a potential 30 drop in Ethereum following the launch of spot ETH ETFs

Andrew Kang, founder and partner at crypto-focused venture capital firm Mechanism Capital, predicts that the launch of spot Ether exchange-traded funds (ETFs) could cause Ether to fall to as low as $2,400. Currently, Ether is trading at $3,410, so this would represent a nearly 30% drop in price. Kang explains that unlike Bitcoin, Ether attracts less institutional interest, lacks incentives for conversion into ETFs, and has underwhelming network cash flows. He believes that an Ether ETF would not provide much upside potential. Kang also predicts that spot Ether ETFs would attract only 15% of the flows that spot Bitcoin ETFs have seen. He estimates that spot Ether ETFs could receive $840 million in inflows over six months. Not everyone agrees with Kang’s prediction, as industry analyst Patrick Scott expects a similar movement as spot Bitcoin ETFs but does not anticipate Ether’s price to double. Asset management firm VanEck, on the other hand, believes that spot Ether ETFs could drive Ether’s price to $22,000 by 2030. Kang argues that Ethereum’s pitch as a decentralized financial settlement layer, world computer, or Web3 app store is a hard sell when looking at the data. He believes that Ethereum may appear to be an overpriced tech stock. Kang notes that the surprise approval of ETFs may limit marketing pitches to institutional investors and suggests that the removal of staking from spot Ether ETFs could discourage investors from converting their Ether into ETF form. Kang acknowledges that BlackRock and other financial institutions are tokenizing real-world assets on Ethereum but questions the impact on Ether’s price. He predicts that the ETH/BTC price ratio could slide from 0.054 to as low as 0.035 over the next 12 months. However, Kang believes that a Bitcoin price rally to $100,000 could lead to a new all-time high for Ether.