One of the most important reasons put forward in the report is that Ether ETFs do not have a staking feature. Staking means securing the network by locking cryptocurrencies and earning rewards in return. Unlike Bitcoin, Ether currently offers staking. This may make it attractive for investors to earn additional returns through staking by purchasing Ether directly instead of spot ETFs.

However, Bernstein analysts also note a positive point. They predict that the arbitrage strategy called “basis trading” between spot ETFs and futures contracts will become popular over time. This strategy involves buying the spot ETF and selling the futures contract at the same time, then waiting for the prices to converge. This activity is expected to contribute to healthy liquidity in the ETF market.

The report also highlights that Ether, as a “tokenization platform,” creates powerful use cases such as stablecoin payments and tokenization of traditional assets and funds. This could positively impact the demand for Ether in the long run.

Bernstein thinks that the upcoming elections in the USA will significantly affect the cryptocurrency market. According to the report, both the increased likelihood of a Republican victory and Donald Trump’s adoption of a more positive perspective on the cryptocurrency market could lead to “more advanced” regulations. This may contribute to making the cryptocurrency market more stable and reliable.

Other financial giants such as JPMorgan predict that demand for Ether ETFs will be lower compared to Bitcoin ETFs. Bitcoin’s first-to-market advantage is seen as having the potential to satiate the overall demand for cryptocurrency ETFs. This situation may cause investors to turn more to Bitcoin ETFs in the short term.

However, it is possible to say that the cryptocurrency market continues to move in a positive direction overall. Bernstein notes in his report that despite recent price declines, “the structural adoption cycle remains intact.” This can be interpreted as a sign that cryptocurrencies may become an important part of the financial system in the long term.

Although the approval of Ether ETFs is an important step for the cryptocurrency market, it remains unclear in what direction the regulations will take shape. US elections and the policies of the new government are among the factors that will significantly affect the future of the cryptocurrency market. Investors need to follow the market closely and do their own research before taking action.