Ethereum Derivatives Inflows Will Explode In H2, Bitwise CIO Predicts

Key Insights:

• Bitwise CIO Matt Hougan predicts that Ethereum ETFs could attract up to $10 billion in inflows by the end of H2.
• Ethereum’s role in tokenized real-world assets will likely be a major driver for institutional interest.
• ETH’s price recently surged past a consolidation range to $2,600, and analysts are on the lookout for a breakout soon.

Ethereum may be preparing for a breakout moment in the second half of the year.

Interestingly, this is not just in terms of price but in institutional adoption. According to insights from Matt Hougan, Chief Investment Officer at Bitwise Asset Management, ETH ETFs could attract up to $10 billion in inflows by the end of the year.

This prediction comes just as Ethereum gains traction not only as the dominant defi platform, but also as the backbone for other applications like tokenized stocks, stablecoins and enterprise adoption. Here are Hougan’s comments, and what they could mean for Ethereum as a whole.

Ethereum ETFs Already Pulling in Capital

Hougan’s forecast comes after a strong period for Ethereum ETFs in June of this year, where the ETF market pulled in $1.17 billion in net inflows. If this trend continues, the second half of the year could stand as a major turning point for Ethereum in terms of its institutional journey.

The Bitwise CIO believes that sidelined investors are starting to see ETH differently, not just as a “tech coin”, but as part of the digital financial space. “The combination of stablecoins and stocks moving over Ethereum is an easy-to-grasp narrative for investors,” Hougan explained on social media.

Ethereum’s Shift Toward Tokenized Stocks

A major part of Ethereum’s bullish narrative is its increasing role in the tokenization of real-world assets (RWAs), especially stocks. One major example is Robinhood, which recently announced plans to issue up to 200 tokenized U.S. stocks and ETFs using Arbitrum (an Ethereum Layer 2 network).

This move shows that ETH is becoming more than just a network for smart contracts. It is becoming a bridge between traditional finance TradFi and the blockchain world

As it stands, other major firms like PayPal, Visa, Stripe, Fidelity, Sony and even Ernst & Young are also looking into Ethereum-based applications.

The Numbers Speak for Themselves

Ethereum ETFs are gaining ground fast. For example, on July 1, BlackRock’s iShares Ethereum Trust (ETHA) recorded $54.8 million in net inflows. Since its launch, the fund has attracted $5.5 billion, and is now one of the top-performing Ethereum investment vehicles.

ETHA has seen inflows for 29 of the last 30 trading days, and while Bitcoin ETFs have held the headlines for most of the past year, some of them have started to see outflows compared to Ethereum’s.

Ethereum ETF inflows are encouraging, Source: Soso ValueIn fact, Bitcoin ETFs recently broke a 15-day inflow streak after recording $342.25 million in outflows on a single day. This contrast shows that investor interest might be shifting, or at least diversifying.

Ethereum’s Institutional Strategy

Beyond ETF inflows, institutional interest in ETH is becoming stronger in other ways

Several publicly traded companies have announced plans to adopt Ethereum as part of their treasury strategy. This is in the footsteps of Michael Saylor and MicroStrategy, Bitcoin’s most famous corporate backer.

For example, Bit Digital (BTBT) plans to raise $162.9 million to buy Ethereum, and is shifting its strategy from Bitcoin mining to ETH accumulation.

SharpLink Gaming (SBET) has already bought 198,167 ETH after raising $24.4 million via stock sales. Finally, BitMine Immersion Technologies (BMNR) is preparing to raise $250 million to kick off its own ETH treasury holdings.

These moves show that institutional investors are jumping into the Ethereum market by the numbers, and Ethereum is becoming a valid store of value, just like Bitcoin.

ETH Price Outlook

Soon after Hougan’s bullish prediction, ETH saw an 8% price surge, and pushed past its tight consolidation range between $2,300 and $2,500. As of Thursday, Ethereum is now trading at $2,600 with a 6% intra-day price increase.

Analysts are watching closely for a breakout from the ascending triangle pattern shown below.

Ethereum’s ascending channel, Source: TradingViewAs of now, technical indicators show RSI readings above neutral levels, which shows rising buying pressure. Still, to maintain a breakout, ETH will need to stay above the resistance and hold support from the 50-day and 100-day Simple Moving Averages (SMAs)

A failure to break above could lead to a retracement below the $2,100 price level.