Ethereum ETF Seen Triggering 'Larger' Supply Shock Than Bitcoin, Warns Co-Founder

Ethereum ETF Seen Triggering 'Larger' Supply Shock Than Bitcoin, Warns Co-Founder

Ethereum ETF Could Cause 'Potentially Larger' Supply Shock Than Bitcoin In a recent interview, Ethereum co-founder Joseph Lubin expressed concerns that a spot Ethereum ETF could potentially trigger a larger supply shock than the one experienced by Bitcoin (BTC) after its ETF approval. Lubin explained that Ethereum's smaller supply relative to demand, combined with a significant portion of ETH staked and a different issuance schedule, makes it more susceptible to price volatility. He noted that over 27% of all ETH is currently staked, limiting the supply available for ETF purchases. Unique Ethereum Factors Additionally, Ethereum's issuance schedule is different from Bitcoin's, with a significant portion of new issuance being burned, further constraining supply. Lubin believes this combination of factors could result in a larger supply shock for Ethereum than was seen with the Bitcoin ETF. "I think it's fair to assume that Ethereum has an even smaller supply relative to that demand, compared to where Bitcoin was in January when the spot Bitcoin ETF was approved," Lubin said. Market Impact An Ethereum ETF would make it easier for investors to gain exposure to the cryptocurrency, potentially driving up demand. However, the limited supply of ETH available could exacerbate the price increase, potentially creating a more significant supply shock than Bitcoin experienced. Lubin's concerns highlight the importance of considering the unique characteristics of each cryptocurrency when assessing the potential impact of ETFs.