Ethereum’s tokenomics, scale, institutional money flow – All outlined by author and former Bitcoin Magazine editor in chief Mark Helfman. Helfman, known for his talent for distilling complex crypto concepts, gets into an incredibly salient topic. Here’s his argument for why such large inflows into Ethereum ETFs will not result in immediate price appreciation for institutional investors. His analysis offers a valuable lens into the larger cryptocurrency market dynamic, especially given the overwhelming asset size of Ethereum.
Mark Helfman, the author of three books, is a leading international voice at the intersection of cities and cryptocurrency. He is recognized as a top Bitcoin writer on both Medium and Hacker Noon, where he shares his perspectives on various crypto-related topics.
Helfman is the author of the Crypto is Easy newsletter, which provides clear, easy to understand breakdowns of our crazy crypto world. Readers can subscribe to his newsletter at https://cryptoiseasy.beehiiv.com/ for regular updates and insights. His work can be found on Medium at https://medium.com/@m.helfman and on Hacker Noon at https://hackernoon.com/u/MarkHelfman.
Helfman goes on to point out that Ethereum has garnered the largest inflows into its ETFs so far. Its huge market size mitigates the impact on its price. Adjusted for Ethereum’s much larger $340 billion asset base, this would need to be a much larger inflow to move the price substantially.
Those steep declines aside, the most shocking stat is total inflows – $3.6 billion in a single year. While that’s a phenomenal sum, it cannot compare with Ethereum’s total market cap. This goes a long way to explaining why investors are not realizing the short-term returns they would typically expect from this kind of inflow. Its large asset size means that any inflow, even of truly large size, will not cause huge positive price movements even if the cash inflow qualifies as dramatic.
