Ethereum next on the institutional list
SEC’s clearance to Ethereum as “not a security” with the launch of CME futures due in February next year has instilled confidence among investors about ETH.
If institutions begin adding Ethereum to their portfolios based on total market capitalization, Grayscale’s Ethereum fund should see larger inflows.
For instance, the Bitwise 10 Crypto Index Fund uses a weighted-market capitalization technique to balance their crypto index. Currently, the allocation ratio of Bitcoin to Ethereum in Bitwise’s index is 6.46:1.
Bitwise had gained a lot of traction since its launch last month.
The analysis based on realized capitalization and institutional allocation points to greater potential in altcoins. Young Ju added,
“If Grayscale clients rebalance their portfolio based on the market cap, ETH price would be $903. (Current price: $714).”
However, many of these come with regulatory risks—like SEC’s lawsuit against Ripple, which saw Bitwise and others liquidate its XRP position. The top two currencies, however, are currently exempt from such risks in the U.S.