Currently, Ether is trading at $3,410. A drop to $2,400 would represent a drop of almost 30% from its current price. Unlike Bitcoin, Ether has attracted less institutional interest, there is little incentive to convert spot Ether into ETF form, and network cash flows are unimpressive, Kang said in a June 23 post.

“How much upside could an ETH ETF provide? I don’t think it would provide much,” Kang said.

“After the ETF launch, my expectation is between $2,400 and $3,000.”

This forecast price could be a significant step back for the asset considering Ether had already climbed above $4,000 in March when Bitcoin reached a new all-time high. It reached almost the same level again a few days before the US Securities and Exchange Commission (SEC) approved Ether ETFs.

Kang thinks spot Ether ETFs will attract 15% of the flows seen by spot Bitcoin ETFs, which falls within the 10-20% range predicted by Bloomberg ETF analysts Eric Balchunas and James Seyffart.

Kang noted that only $5 billion of new funds (excluding funds converted from spot form) flowed into spot Bitcoin ETFs in the first six months.

“I think the expectations of cryptocurrency users are overinflated and disconnected from the real preferences of traditional financial allocators,” Kang said.

Kang’s price prediction is not accepted by everyone. Industry analyst Patrick Scott (known as Dynamo DeFi) recently told Cointelegraph Magazine that he expects a directional move similar to the performance of spot Bitcoin ETFs. However, he does not think the price of Ether will double.

Meanwhile, asset management firm VanEck believes spot Ether ETFs could push Ether to $22,000 by 2030.

Kang argued that Ethereum’s value proposition to investors as a decentralized financial settlement layer, a world computer or Web3 app store may have some weight, but it’s a “hard sell” looking at the data.

Ethereum’s future as a cash flow “machine” looked more promising as fees were boosted by decentralized finance and the recent NFT cycle. But that didn’t last, and now Ethereum may look like another overpriced tech stock:

“With $1.5 billion in annualized 30-day revenue, a 300x PS ratio, a negative earnings/PE ratio after inflation, how are analysts going to justify that price to their dad’s family office or macro fund boss?”

The surprise approval also means issuers have less time to make marketing pitches to institutional investors, Kang said. However, Bitwise and VanEck are among the few approved Ethereum ETF applicants that have already run Ethereum-themed ads.

Kang added that the removal of staking from the proposed spot Ether ETFs could also deter investors from converting their spot Ether into ETF form.

Kang acknowledged that BlackRock and other financial institutions have begun making moves in the area of ​​tokenizing real-world assets on Ethereum, but he is unsure how much of an impact this will have on Ether’s price.

The Mechanism Capital manager thinks that the ETH/BTC price ratio could drop from current prices of 0.054 to as low as 0.035 in the next 12 months.

However, Kang thinks that a Bitcoin price rise to $100,000 in the next six to nine months could “carry” Ether to a new all-time high over the course of…

Kang’s predictions or not, the launch of spot Ether ETFs will be a major milestone for the Ethereum ecosystem and the cryptocurrency market. By allowing new investors to enter the market, it could increase the adoption of Ether and potentially increase its stability. However, we will have to wait to see what the market reaction will be.