By Matt Hougan, Chief Investment Officer of Bitwise

Compiled by Luffy, Foresight News

In last week's investment memorandum, I predicted that by the end of 2025, Ethereum ETP will bring in a net inflow of $15 billion. This will be a huge achievement, making Ethereum ETP one of the most successful ETPs in history.

However, Ethereum ETP still cannot compare to Bitcoin ETP. Bitcoin ETP has attracted net inflows of $14 billion in less than six months since its listing. I expect that by the end of 2025, with the participation of financial giants such as Morgan Stanley and Merrill Lynch, this figure will soar to over $50 billion.

In terms of market capitalization, Bitcoin is three times the size of Ethereum, so it is reasonable for Bitcoin ETP to attract three times the funds of Ethereum ETP.

But since I wrote that memo, some things have been lingering in my mind. If things were to develop differently, the performance of Ethereum ETP could far exceed my expectations.

The reasons are as follows.

Ethereum is like high-growth tech stocks

Naive investors (and some media) confuse Bitcoin and Ethereum. The reason is easy to understand: they are the two largest encryption assets. But our readers should know that they are fundamentally different, just like gold and oil.

From a design perspective, Bitcoin is a new type of currency asset. It is designed to compete with gold, the US dollar, and other fiat currencies, to become a store of value and ultimately a medium of exchange.

This is an exciting field. The gold market is worth over 10 trillion dollars, while the "currency" market is the largest market in the world. If Bitcoin successfully enters these markets, its value will still pump 10 times or more.

Ethereum, on the other hand, is completely different. Ethereum's structure is a technical platform: it is a fully programmable blockchain and the cornerstone of tokenization, stablecoins, and decentralized finance (DeFi) applications.

The economic principles of Ethereum are simple: under the same conditions, as more and more people use these applications, the value of the asset ETH on the Ethereum blockchain will rise. This is because you must pay ETH to use the platform.

Leading blockchain use cases, Source: Bitwise Asset Management

Why Ethereum ETP's performance exceeds expectations

This is why I suspect that the performance of Ethereum ETP may be as expected. After all, investors like technology stocks. Almost all investors have invested in high-growth technology stocks such as Nvidia and Meta, while relatively few investors have invested in currency assets such as gold.

Imagine, what would happen if investors sold a small amount of tech stocks and increased their holdings of ETH? I think that investors prefer holding technology assets like Ethereum rather than investing in a new currency asset.

Therefore, we need to bring the core concept of Ethereum (i.e. ETH being a technological investment) into mainstream attention. And to achieve this, we need to do two things: 1) Make more people understand the differences between Ethereum and Bitcoin; 2) Some applications built on Ethereum need to gain mainstream attention.

What would that look like? One can imagine stablecoin assets growing from $160 billion to $16 trillion as more people embrace the speed and transparency of blockchain payments; or DeFi opening up new lending channels as regulatory clarity emerges; or more companies following BlackRock's lead in establishing tokenized funds on Ethereum.

Perhaps investors need a new ETF, with 10% in ETH and 90% in technology stocks.