According to recent data, despite the high chances of an Ethereum (ETH) Exchange Traded Fund (ETF) launch next week, a growing number of traders have taken short positions on the asset. This comes as Bitwise Chief Investment Officer (CIO), Matt Hougan, projected significant success for ETH ETFs, estimating potential net flows of up to $15 billion within the first 18 months on the market.

Hougan's analysis was based on a comparison of Bitcoin (BTC) and ETH market shares, as well as the Assets Under Management (AUM) of ETFs in Canada and Europe. At the time of his analysis, BTC held 74% of the market with a market cap of $1.19 trillion, while ETH accounted for 26% with a market cap of $405 billion.

Hougan noted that similar demand patterns were observed across ETFs in Europe and Canada. In Europe, Bitcoin ETPs accounted for 78% of the AUM, amounting to €4,601, whereas Ethereum ETPs represented 22% with €1,305. Similarly, in Canada, Bitcoin ETPs accounted for 77% of the AUM with $4,942 CAD, while Ethereum ETPs held 23% with $1,475 CAD.

Based on these figures, Hougan concluded that the "normal" demand for ETPs between BTC and ETH investors could result in ETH ETFs accumulating $35 billion in AUM by the end of 2025, if US spot BTC ETFs' AUM reaches $100 billion.

At present, BTC ETFs have amassed $52 billion in AUM, as disclosed by Soso Value data. However, Hougan clarified that the anticipated $35 billion in ETH ETF flows should be adjusted for the $10 billion in assets held by Grayscale's Ethereum Trust (ETHE), which is expected to convert upon the launch of an ETH ETF. Factoring in the EU's 22% market share, the flow estimate decreases to $18 billion, and further adjustments for likely reduced carry-trade flows result in a final estimate of $15 billion.

Despite the growing anticipation for the ETH ETF launch, short positions on ETH have increased from 49% to 51% in the past three days. This is notable as the market currently expects the ETF to be approved next week, with Polymarket's prediction market attributing a 75% probability to the launch.

The price of ETH has also experienced a decline, trading at $3.3k at press time, down 15% from its peak of $3.9k reached after the partial ETH ETF approvals in late May. Whether the market can reverse these losses remains to be seen as investors eagerly await the ETF launch.

Overall, despite some traders taking short positions on ETH, industry experts remain optimistic about the potential success of ETH ETFs, projecting significant net flows and positioning ETH as a strong investment opportunity in the coming years.