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The approval and successful launch of 11 Bitcoin spot ETFs by the SEC on Wednesday, which attracted $2.5 billion in inflows on their first day, have heightened optimism for a potential approval of Ethereum ETFs shortly.
ETF Volume leaderboard:
— Yano 🟪 (@JasonYanowitz) January 11, 2024
1) Grayscale
2) BlackRock
3) Fidelity
4) Ark 21 Shares
5) Bitwise
6) Invesco Galaxy
7) Valkyrie
8) Franklin Templeteton
9) Wisdom Tree
10) Hashdex pic.twitter.com/alZxiQfTGb
With the achievement of the long-awaited Bitcoin ETF milestone, attention has now turned to the possibility of Ethereum being the next cryptocurrency to receive SEC approval for an ETF, providing investors with an avenue to track the performance of the second most valuable digital asset.
Ethereum ETF Prospects Face Uncertainty Amid SEC Chair’s Caution
The surge in Ethereum’s value to its highest point since May 2022, following the Bitcoin ETF news, has fueled anticipation for an Ethereum ETF. However, pending applications for spot ETH ETFs face uncertainties before the SEC, with decisions expected to begin in May 2024. Notably, major finance firms, including BlackRock, Fidelity, Invesco, Ark, and VanEck, are actively seeking Ethereum ETF approvals.
Despite the overall optimism, comments from SEC Chair Gary Gensler have injected uncertainty into the prospects of an Ethereum ETF. Gensler stressed that the approval of Bitcoin funds does not imply a willingness to approve ETFs for other cryptocurrencies, particularly those classified as securities. This distinction holds significance as the SEC predominantly views most cryptocurrencies as securities, potentially presenting obstacles for Ethereum’s journey to ETF approval.
Divergent Views on Likelihood of Ethereum ETF Approval
Despite uncertainties, some industry experts remain optimistic, suggesting that an Ethereum ETF could still secure approval this year. They highlight the evolving stance of the SEC towards cryptocurrency vehicles as a potential factor in favor of approval.
Opinions within the industry vary regarding the likelihood of an Ethereum ETF approval. Nexo co-founder Antoni Trenchev suggests watching the SEC’s actions rather than its statements, emphasizing the rapid pace of developments in the crypto space. Trenchev notes investors are anticipating the next significant spot ETF approval, mirroring the initial skepticism surrounding spot Bitcoin ETFs.
On the contrary, others express skepticism about a swift Ethereum ETF approval, citing SEC Chair Gensler’s recent warnings. SkyBridge Capital founder Anthony Scaramucci acknowledges the likelihood of Gensler’s cautious approach but believes Ethereum’s eventual approval requires patience.
#Bitcoin reached the level I've mentioned for the past months.
— Michaël van de Poppe (@CryptoMichNL) January 11, 2024
I think we'll consolidate. The news is out, the ETF is live, it's great.
Rotation towards Ethereum. pic.twitter.com/zH8CC5oJhf
While the recent Bitcoin ETF approvals signal the SEC’s opening to mainstream cryptocurrency investment vehicles, the agency appears to be proceeding cautiously, as indicated by its reserved stance on Ethereum thus far.
The impact of mounting industry pressure and rising investor demand on expediting the timeline for Ethereum ETF approval remains uncertain. Following the breakthrough with Bitcoin ETF approvals, Wall Street is attentively monitoring for indications of progress or developments in the potential approval of an Ethereum fund.
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