Bitwise CIO Matt Hougan predicted that spot Ethereum ETH -1.66% exchange-traded funds will attract $15 billion of net inflows in their first 18 months, once launched in the U.S.

The U.S. Securities and Exchange Commission approved 19b-4 forms for eight spot Ethereum ETFs from firms like Bitwise, BlackRock and Fidelity on May 23. However, the issuers still need to have their S-1 registration statements become effective before trading can begin. This is expected to happen in the next few weeks.

Hougan compared ether’s relative market capitalization to bitcoin, data from international exchange-traded product markets and the role of the carry trade in arriving at the figure, in a note sent to clients on Tuesday. The spot Bitcoin ETFs reached $15 billion of net inflows earlier this month after five months of trading.

The Bitwise CIO said he’d expect investors to allocate toward spot Bitcoin and Ethereum ETFs roughly in proportion to their market cap, $1.2 trillion and $405 billion. That would provide a weighting of around 75% for the spot Bitcoin ETFs and 25% for their Ethereum counterparts.

With more than $50 billion in assets under management via the spot Bitcoin ETFs, as things stand, Hougan expects this to reach at least $100 billion by the end of 2025. This will be as the products mature and are approved on platforms like Morgan Stanley and Merrill Lynch.

Using that $100 million as a starting point, the spot Ethereum ETFs would need to attract $25 billion in 18 months to reach “parity,” Hougan said, excluding the expected $10 billion of assets the converting Grayscale Ethereum Trust is expected to bring on launch day.

Taking that figure and comparing data from Bitcoin and Ethereum ETP markets in Europe and Canada, they each have remarkably similar AUM ratios at around 78% for Bitcoin and 22% for Ethereum products, with a potentially lower market share reducing Hougan’s estimate.

Another impact in comparisons is the bitcoin carry trade, referring to a strategy where institutional investors arbitrage the difference between the spot and futures prices, buying the spot Bitcoin ETFs and selling the CME bitcoin futures contracts. They do this to capture a profit from the price spread when the futures contract matures.

Hougan estimates around $10 billion of spot Bitcoin ETF AUM is linked to this carry trade. But he doesn’t expect the spot Ethereum ETFs to have the same dynamic and reckons it should be removed from the calculations.

While some argue the Ethereum ETFs could underperform further, lacking the native staking feature, Hougan said staking income is a “rounding error” and unlikely to impact demand.

Combining these factors, Bitwise lowered its estimate for net inflows into the spot Ethereum ETFs to $15 billion, “but even $15 billion in net new demand will have a dramatic impact on the Ethereum market,” Hougan said.