Ether is the digital silver Ethereum spot ETF may attract 10 of Bitcoin ETF funds

People have always regarded Bitcoin as digital gold, possessing the same hedging value as gold. Can Ethereum with smart contracts be seen as digital silver? Bitfinex’s analysis of gold and silver ETFs suggests that an Ethereum spot ETF has the opportunity to capture 10-20% of the funds currently flowing into Bitcoin ETFs.
According to a report by The Block, Jag Kooner, derivatives product manager at Bitfinex, stated that an Ethereum spot exchange-traded fund (ETF) could capture 10-20% of the funds currently flowing into Bitcoin ETFs.
Bitfinex analysts provided a historical example illustrating how fund managers transfer funds between multiple related ETFs to balance risks. The launch of gold ETFs provided a historical parallel because when new gold ETFs were introduced, they attracted significant investments, affecting the flow of existing financial products related to gold. Similarly, the introduction of an Ethereum ETF may lead fund managers to reallocate funds to balance their exposure to Bitcoin and Ethereum.
The first gold spot ETF was launched in November 2004, when SPDR Gold Trust (GLD) debuted on the New York Stock Exchange, fundamentally changing gold trading by offering investors a convenient and liquid way to invest in gold without physical ownership. When the first silver ETF was introduced in 2006, investors increased their positions and shifted funds into it, especially due to the increasing demand for silver in industrial applications.
Therefore, it is speculated that if an Ethereum spot ETF is officially launched, it could capture 10-20% of the funds currently flowing into Bitcoin ETFs.
Bloomberg ETF analyst Eric Balchunas is also studying silver ETFs and gold ETFs, viewing Ethereum as playing a role similar to silver.
As people have always regarded Bitcoin as digital gold, possessing the same hedging value as gold, it also makes sense to analogize Ethereum as silver because both silver and gold are precious metals that have been considered currencies in ancient times. However, silver is also an important industrial metal with high electrical and thermal conductivity, making it widely used in industries such as electronics, photography materials, pharmaceuticals, and chemicals.
In comparison to Bitcoin’s payment applications, ETH has more practical and embedded applications, which is another important reason why Ethereum is likened to digital silver.
However, Balchunas estimates that the performance of an Ethereum spot ETF, with a 10% return compared to Bitcoin spot ETFs, would already be quite good.