Ethereum (ETH) exchange-traded products (ETPs) are set to draw $15 billion in net inflows within the first 18 months of their launch, according to Matt Hougan, Chief Investment Officer (CIO) at Bitwise. In a recent report, Hougan underscored that Bitcoin and Ethereum ETPs should capture net inflows comparable to their market cap, where ETH gets 26% of the combined market.Currently, US investors hold approximately $56 billion in Bitcoin ETPs, and the Bitwise CIO expects this to rise above $100 billion by 2025. Ethereum’s market cap, which stands at $432 billion, suggests a substantial potential for asset inflow, aiming for parity with Bitcoin ETPs at around $35 billion.

“For starters, the Grayscale Ethereum Trust (NYSE: ETHE) is expected to convert to an ETP on launch day, bringing $10 billion in assets with it. Net that out and we’re left with $25 billion in inflows to reach parity,” he highlighted in the report.

However, Hougan points out the fact that Ethereum ETPs are slightly underperforming their absolute market cap weight, as they are currently gathering 22-23% of total assets under management versus a 26% market cap weighting.

“I can imagine various reasons, including that Bitcoin ETPs arrived first in many of these markets (as they did in the U.S.). Some investors may have bought a Bitcoin ETP and stopped there, thinking their crypto exposure was covered. I suspect this dynamic will be true in the U.S. as well,” he added.

Therefore, Hougan lowered his expectations from $25 billion to $18 billion, excluding the assets from Grayscale’s trust.Additionally, there’s another factor taken into consideration by Bitwise’s CIO, which is the “carry trade.” Carry trade involves buying spot Bitcoin ETPs and selling Bitcoin futures contracts against that position, and traders profit from the premium between futures and spot prices.

“I don’t expect Ethereum will have the same dynamic—the Ethereum ETP carry trade isn’t profitable right now for institutions (in part because U.S. Ethereum ETPs won’t engage in staking their assets). For that reason—and to keep my estimate of Ethereum ETP flows on the conservative side—we need to remove the $10 billion in carry-trade-related AUM when sizing the Bitcoin market.”

As a result, Bitcoin’s initial denominator of $100 billion falls to $90 billion, and the adjusted estimate for Ethereum ETPs’ net inflows becomes $15 billion.