Ethereum (ETH) Could Drop 30% After Spot ETF Launch, Says Crypto Investor

ethereum eth

Kang believes the ETH/BTC price ratio, currently at 0.054, could drop to as low as 0.035 next year

Andrew Kang, co-founder and partner at crypto-focused venture capital firm Mechanism Capital, warned that Ether (ETH) could see a significant drop in value, potentially reaching as low as $2,400.   

According to CoinGecko, Ether is currently trading at $3,410. If it falls to $2,400, that would be almost a 30% drop.  

In a June 23 post on X, Kang mentioned that Ether is less appealing to institutional investors than bitcoin. He also noted several reasons for converting spot Ether into an ETF and that the network’s cash flows haven’t been solid.   

EThereum’s Predicted Price?

He further noted that the predicted price drop would be a significant setback for Ether, which had climbed over $4,000 in March when bitcoin hit a new all-time high. Ether nearly reached that high again just before the U.S. Securities and Exchange Commission (SEC) approved Ether ETFs.  

Kang expects spot Ether ETFs to attract about 15% of the investment that spot Bitcoin ETFs have received, which aligns with the 10-20% range estimated by Bloomberg ETF analysts Eric Balchunas and James Seyffart.  

Kang mentioned that spot Bitcoin ETFs received $5 billion in new funds in the first six months, not counting those converted from spot form.

Based on data revealed, similarly, spot Ether ETFs might receive around $840 million in new funds during the same period.

“I believe that the expectations of crypto natives are overinflated and disconnected from the true preferences of tradfi allocators,” Kang said.   

Kang and Ethereum 

Kang argued that Ethereum’s appeal to investors as a decentralized financial settlement layer, a world computer, or a Web3 app store might sound compelling. However, he believes it’s a tough sell when you examine the data.  

He stated that Ethereum seemed promising as a cash flow generator in the past, especially during periods of high fees from decentralized finance and non-fungible tokens. However, that development has not continued, and now Ethereum might appear to some as just another expensive tech stock. 

Meanwhile, asset management firm VanEck believes that spot Ether ETFs could help boost Ether’s price to $22,000 by 2030.   

Kang believes the ETH/BTC price ratio, currently at 0.054, could drop to as low as 0.035 next year.